PERMANENT FUTURE: A comprehensive guide for cryptocurrency retailers
The world of cryptocurrency trade is a very unstable and rapid development landscape, and new opportunities are emerging every day. A class of assets that has received significant attention in recent years is the trade of eternal futures. In this article, we deepen the trade of continuous futures, its benefits, risks and how cryptocurrency merchants can use it.
What are the eternal future?
The permanent futures, also known as eternal agreements or eternal options, are a type of economic derivative that allows merchants to bet on the future price of property without the term of validity. Unlike traditional alternatives that have an expiration date and have to be used at a certain schedule, eternal futures allow merchants to control the position for an indefinite period.
How eternal the futures store works?
During the constant negative negotiation, the merchant concludes the contract with the buyer (length) or the seller (short) with a cryptocurrency asset that agrees to buy or sell properties at a certain price the next day. The contract is generally structured as follows:
* Fund property: cryptocurrency assets that are negotiated.
* Laca price: The predetermined price to which the merchant closes its position.
* TIME (TIF): Time in which the buyer or seller has to fulfill his duty. TIF generally varies from 3 to 30 seconds, allowing merchants to quickly react to market development.
* The size of the survey: The total value of the contract, usually in the underlying property units.
When a merchant signs an eternal futures contract, he mainly appealed to the selected cryptocurrency price movement. If the market is transferred against them and the exercise price falls below the current market price, the merchant is obliged to buy or sell legislation. In contrast, if the market is transferred for them and the price of the lacquer increases above the current market price, the merchant is obliged to sell or buy.
The benefits of trade of eternal futures in cryptocurrency retailers
Perpetual Futures Trading offers a series of benefits that make it an attractive alternative to cryptocurrency retailers:
* Fugue: Using eternal futures, merchants can strengthen their return with a low risk. The leverage factor is typically higher than traditional options and cryptocurrencies, which allows merchants to control larger places less capital.
* Low risk: The traditional trade of futures eliminates the need for margins or liquidity risks related to traditional alternatives.
* Market surveillance: Merchants can monitor market activities and quickly adapt their position in response to changes in property price.
* scalable: The continuous future allows merchants to exchange higher amounts at a lower cost, which makes it an ideal option for speculative merchants.
Commercial risks of eternal futures of cryptocurrency retailers
Although constant futures trade offers many benefits, there are also risks to these markets:
* Market volatility:
The cryptocurrency market is known for its great volatility, which can lead to rapid prices and high losses.
* Liquidity risk: Continuous futures contracts often have low liquidity, which makes it difficult to access or leave quickly. This can increase the time needed to close the station and lead to significant losses if market conditions are affected.
* Accounting Accounting: Merchants are exposed to the risk of counterpart when trade with other parts on eternal futures platforms. If one part is neglected, the other may not be able to fulfill their responsibilities or compensate them.
