What do the current quarterly contracts and perpetual contracts in the currency circle mean? How do they operate?

In the cryptocurrency market, quarterly contracts and perpetual contracts are the two main derivatives contracts, providing traders with flexible risk management and leverage trading strategies. Quarterly contracts are contracts that expire on a specific expiration date and are forced to settle, and can be used to speculate on market forecasts within a specific time period. A perpetual contract is a contract with no expiry date that allows multiple opening and closing operations, making it a useful tool for hedging or trading amid continued asset price changes.

Quarterly contracts and perpetual contracts in the currency circle

In cryptocurrency trading, quarterly contracts and perpetual contracts Renewal contracts are two common derivatives contracts.

Definition

• Quarterly contract: is a contract with a fixed expiration date and will be settled at the settlement price after expiration .
• Perpetual contract: A contract that has no expiration date and can be held indefinitely.

Operation

Current Quarter Contract

• Buy: Contract The price is lower than the price of the underlying asset, and the underlying asset is expected to rise.
• Sell: The price of the contract is higher than the price of the underlying asset and the underlying asset is expected to fall.

Perpetual contract

• Long (bullish): Buy the contract in the expectation that the price of the underlying asset will rise.
• Short (Bearish): Sell a contract in the expectation that the price of the underlying asset will fall.

Note

• The position will be automatically closed after the current quarter contract expires, while the perpetual contract can be held indefinitely.
• Perpetual contracts are usually accompanied by funding rates, which depend on the relative balance of long and short positions.
• Derivatives trading is highly leveraged and potentially high risk.

Example

Assume the Bitcoin spot price is $20,000.

• Buy the current quarter contract: If you think the price of Bitcoin will increase, you can buy the current quarter contract that settles at $20,100.
• Sell Perpetual Contracts: If you think the price of Bitcoin will fall, you can sell perpetual contracts.

The above is the detailed content of What do the current quarterly contracts and perpetual contracts in the currency circle mean? How do they operate?. For more information, please follow other related articles on the PHP Chinese website!