Perpetuals Trading
Last updated
Last updated
Crypto futures are contracts that represent the value of a specific cryptocurrency. When you purchase a futures contract, you do not own the underlying cryptocurrency. Instead, you own a contract in which you agree to buy or sell a specific cryptocurrency at a future date.
A Perpetual Contract is similar to a traditional futures contract, but with a key difference: There is no expiration or settlement date for perpetual contracts. This allows traders to hold positions indefinitely. The goal is to mimic the behavior of the spot market, reducing the price gap between the futures price and the mark price. This is an improvement over traditional futures contracts, which can have prolonged or even permanent differences from the spot price.
On the navigation bar, hover over 'CEX Trade', then click 'Futures' to access the interface.
The main concepts of perpetual trading are as follows:
Margin Modes
Cross Margin: Uses all available funds in your account as collateral for your trades.
Isolated Margin: The amount of margin is limited to a specific position, isolating your risk.
Adjust Leverage
Leverage trading allows you to use a smaller amount of initial capital to gain exposure to larger positions. The leverage ratio shows how many times your initial capital is multiplied.
Delta-Neutral Strategy
A delta-neutral strategy involves holding offsetting positions that result in a net zero delta, minimizing a portfolio’s sensitivity to price movements. A guide for the Delta-Neutral Strategy can be found here
TP/SL
Stop Loss (SL): A stop-loss is a predetermined price, set below the current price, at which the position will be closed to limit losses.
Take Profit (TP): A take-profit level is a preset price at which traders close a profitable position.
Reduce Only: These orders are used to close or reduce a position and cannot be used to open a new position in the opposite direction.
Long and Short Positions
Long: If you go long (agree to purchase) and the mark price is above the forward price on the expiration date, you will profit.
Short: A short position occurs when a trader sells an asset they expect to decrease in price.
You can adjust the leverage according to your needs, with all position sizes calculated based on the contract's notional value. The initial margin is determined by the leverage you select.
Please note that you should choose your leverage (and fulfill the initial margin requirement) before opening positions. The higher the leverage, the smaller the notional size you can open; the lower the leverage, the larger the notional size you can open.
A simple guide for opening a position includes the following steps:
Adjust the leverage ratio.
Enter the total size of the position, considering the leverage ratio and the cost.
Set advanced settings such as TP/SL and Reduce Only.
Execute the position by clicking 'Long' or 'Short'.
After confirmation, you can see the status of your filled orders at the bottom of the page. In perpetuals trading, you can also check your open positions and their histories here.
