What is Perptual Futures?
Figure:https://www.gate.com/futures/USDT/BTC_USDT
Perptual Futures (Perpetual Contract) is a type of cryptocurrency derivation that has no delivery date, allowing users to conduct leveraged trading in both long and short directions on a certain underlying asset (such as Bitcoin, Ethereum, etc.). Unlike traditional futures, Perptual Futures have no expiration date, so they can be held “perpetually” until the user manually closes the position.
This design is very suitable for investors who want to profit from market fluctuations in the short or medium term.
The difference between Perptual Futures and futures contracts
Although Perptual Futures and futures contracts are similar in form, they have the following key differences:
- Different delivery times: Perptual Futures have no expiration date, while futures contracts have a specific delivery date.
- Price anchoring method: Perptual Futures anchors the spot price through a funding fee mechanism; while the price of futures contracts is influenced by supply and demand, which may lead to a long-term divergence from the spot price.
- Trading Flexibility: Perptual Futures can be held for a long time, making trading more flexible.
Core mechanism of Perptual Futures: funding rate
The funding rate is one of the core mechanisms of Perptual Futures. It is a fee paid periodically between the long and short sides to adjust the deviation between the contract price and the spot price. For example, when market sentiment is bullish, longs may need to pay the funding rate to shorts to curb excessive increases. Gate settles the funding rate every 8 hours, and users are only affected when they have open positions.
This mechanism keeps the price of Perptual Futures close to the spot price of the underlying asset, maintaining market fairness.
Why choose Gate platform to trade Perptual Futures?
As one of the world’s leading encryption trading platforms, Gate offers professional, secure, and highly liquid Perptual Futures services, with the following advantages:
- Rich variety: Supports hundreds of encryption assets’ Perptual Futures, including BTC, ETH, SOL, DOGE, and more.
- User-friendly interface: The interaction is simple, the operation process is clear, and newbies can easily get started.
- Risk Control Mechanism: Equipped with automatic position reduction (ADL) and liquidation protection mechanisms to reduce the risk of forced liquidation.
- Mobile support: Supports one-click ordering on the Gate App, allowing you to keep track of market dynamics anytime, anywhere.
The operation steps for Gate Perptual Futures
Newbie opens Perptual Futures trading on Gate, usually following these steps:
- Register and log in to your Gate account
- Recharge USDT or other supported margin assets
- Enter the “Contract Trading” page and select “Perptual Futures”.
- Set the leverage multiplier, choose long or short position.
- Set take profit and stop loss, confirm the order
After the transaction, users can view real-time profits and losses on the “Positions” page and can close positions or add margin at any time.
Risk Warning and Newbie Advice
Perptual Futures have high profit potential, but they also come with significant risks. Newbies should pay attention before trading:
- Control the leverage ratio, it is recommended to start with low leverage (such as 2x or 5x);
- Set stop-loss lines to avoid emotional trading.
- Familiarize yourself with the funding rate mechanism and pay attention to the settlement time.
- Do not operate with a full position; keep a certain amount of margin to prevent forced liquidation.
In addition, you can use the simulated trading feature provided by Gate for risk-free practice.
Summary
Perptual Futures are highly attractive derivation tools in the encryption market, suitable for investors who have a clear view of market direction. Taking Gate as an example, it offers a complete range of contract varieties and a high-quality trading experience, making it suitable for Newbies to gradually learn and practice. However, it is essential to remember: investment carries risks, and trading requires caution. Mastering knowledge and operating reasonably is the first step towards stable profits.
