What is a perpetual contract? What is the minimum multiple for a perpetual contract?

A perpetual contract is a derivatives contract that can be long or short without holding the underlying asset. Similar to traditional futures contracts, perpetual contracts have no expiration date and therefore can be held indefinitely. This flexibility offers traders the possibility to take long-term positions without fear of contract expiration. The margin requirements for perpetual contracts vary depending on the exchange and the underlying asset, and are generally between 1% and 20% of the value of the underlying asset; in addition, some exchanges also provide leverage, allowing traders to trade with amounts higher than the margin requirements .

What is a perpetual contract?

A perpetual contract is a derivatives contract that allows traders to take a long or short position on the underlying asset without owning it. Perpetual contracts are similar to traditional futures contracts, but have no expiration date and can therefore be held indefinitely. This provides traders with greater flexibility, allowing them to take long-term positions without having to worry about contract expiration.

What is the minimum multiple of the perpetual contract?

Margin requirements for perpetual contracts may vary by exchange and underlying asset. Generally speaking, margin requirements are 1%-20% of the underlying asset value. Some exchanges also offer leverage, allowing traders to trade with higher amounts than the margin requirements.

Calculation examples of different leverage multiples:

• Underlying asset value: 1,000 USD
• Margin Requirement: 10%
• 10x Leverage: Margin=1,000 USD x 0.10 x 10 = 100 USD, tradable value = 1,000 USD
• 20x leverage: Margin = 1,000 USD x 0.10 x 20 = 200 USD, tradable value = 2,000 USD
• 50x leverage: Margin = 1,000 USD x 0.10 x 50 = 500 USD, tradable value = 5,000 USD

Perpetual Contract Trading Guide

1. Choose an exchange and underlying assets: Choose a reputable exchange And choose underlying assets that suit your risk tolerance.

2. Set margin: Deposit the corresponding margin according to the exchange requirements and consider using leverage.

3. Open a position: Decide if you want to go long or short and enter the corresponding quantity and price.

4. Monitor positions: Regularly check the performance of your positions and make adjustments if necessary.

5. Take profit or stop loss: Set a take profit or stop loss order to manage risk and lock in profits.

6. Close: When you reach your profit target or trigger a stop-loss order, close the position to close it.

7. Withdrawal: Once the position is closed, you can withdraw money from your trading account.

FAQ

Q: What are the advantages of perpetual contracts?

• There is no expiration date, and positions can be held for a long time.
• Provides leverage to amplify potential profits.
• Convenient trading tools suitable for various trading strategies.

Q: What are the risks of perpetual contracts?

• Risk of loss indefinitely, especially when using high leverage.
• Price fluctuations can be dramatic, resulting in rapid losses.
• Systemic risks such as market manipulation or lack of liquidity.

Q: Which traders are suitable for perpetual contracts?

• Experienced traders who understand the risks of derivatives trading.
• Traders who are able to تحمل market volatility and potential losses.
• Traders looking for long-term profit opportunities.

Q: How to choose a reliable perpetual contract exchange?

• Consider the reputation, trading volume and security of the exchange.
• View margin requirements and leverage multiples.
• Research the usability of trading interfaces and trading tools.
• Read user reviews and online forums for real-world trading experiences.

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