What is Perpetual Trading in Futures?

📊 Perpetual futures are a type of derivative that allows traders to speculate on the price movement of an underlying asset, in this case crypto, without a time limit or expiration date.

💰 With perpetual trading, traders can profit either when the market is bullish by opening a long position, or when the market is bearish by opening a short position.

📈 Perpetual trading supports the use of leverage that can boost the potential profits that traders get. However, on the one hand, leverage also has a high risk of liquidation.

To understand perpetual trading, we must first understand the concept of derivatives which is the basis of perpetual trading. Basically, derivatives are financial products whose value is based on another asset, in this case a crypto asset.

One form of derivative product is a futures contract or expiry futures. In a futures contract, each contract has an expiration date with a predetermined price. In addition, there are also perpetual contracts or perpetual futures.

Perpetual futures are derivative assets that track the price of the underlying asset, in this case crypto, but do not have an expiration date. In other words, with perpetual futures, traders can hold their long or short positions for as long as they want. Through perpetual futures, traders can gain exposure to the price movements of their assets, without having to own the assets.