Trading 101: What are Perpetual Futures Contracts?
This article will help you understand Perpetual Futures Contracts and how to optimise this trading option with Bitget.
What are perpetual futures contracts
Perpetual futures contract is a special type of futures contract, which is essentially an agreement between two parties to transact a particular asset at a given date and price. However, as the name implies, this contract type does not have an expiry, therefore investors can keep these contracts open indefinitely and make full use of margin trading without worrying about contract rollover.
The inherent advantages of perpetual contracts are:
- Traders do not have to own the actual underlying asset to enter the crypto market: Crypto futures are mostly cash-settled, which means that there is no need to buy and hold crypto assets to start trading.
Click here for more information on Futures Trading.
- Traders do not have to self-fund the notional contract value: Futures contracts allow traders to borrow equity from the exchange to amplify their buying power. To open a new position, they only need to deposit a small fraction of the contract value as a guarantee for the lender (exchange). More info on Margin Trading can be found here.
As perpetual futures contracts prove themselves to be highly convenient, they are quickly adopted by the crypto market so that everyone has a chance to join the space.
Trading perpetual futures on Bitget
As the leading crypto derivatives exchange since 2018, Bitget offers the ultimate futures trading products for every trader type: Bitget USDT-Ⓜ Futures, Bitget Coin-Ⓜ Futures and Bitget Copy Trade. Our current user base consists of 8 million users from 100 countries worldwide, who have been able to conveniently choose among our 50+ trading pairs and enjoy leverage of up to 125X.
Features
After successfully registering an Bitget account, investors can start to explore our unique blend of security, margining system and competitive trading fees. Our customer service team is available 24/7 to answer your questions at any time!
(1) Security
Crypto Exchange Ranks (CER) has listed Bitget as one of the top 10 exchanges by Cybersecurity - an acknowledgement for our efforts to effectively safeguard our users’ funds over the past four years. Bitget is headquartered in Singapore and has also obtained operating licences in the top regulated jurisdictions - the U.S, Canada and Australia to maintain a seamless operation.
(2) Margin
In addition to the basic margin requirements, such as initial margin, maintenance margin and variation margin, we introduce other margin types with the aim of protecting our traders from unwanted scenarios: available margin and risk margin. Available margin is the total amount of equity available for placing new trades everyday, while risk margin represents traders’ actual delivery obligations.
Simply put, if a trader opens two positions in the opposite directions (one long and one short on the same asset, settled in the same currency), they will offset each other, reducing the obligation associated. Bitget’s implementation of risk margin ultimately helps our users better resist the risk of liquidation.
Bitget always advises our customers to trade responsibly and effectively by adopting various risk management practices. To make it easier, we offer two margin modes: isolated margin mode and cross margin mode, which can be switched interchangeably at any time. Isolated margin mode is better suited for highly speculative orders, and cross margin mode means a holistic portfolio approach. A combination of both allows traders to utilise their equity and simultaneously protect themselves against the worst event of forced liquidation.
(3) Rewards and Fees
Currently, Bitget is running an attractive welcome package for new users with up to 4163 USDT in rewards. Moreover, our trading fees are the same for Bitget USDT-Ⓜ Futures and Bitget Coin-Ⓜ Futures, currently standing at 0.02% for Makers and 0.06% for Takers. When combined with our leverage levels, it is undeniable that Bitget is the lowest-cost option for perpetual futures trading.
(4) Fund Fee
Fund Fee, also known as Funding Rate, is what keeps perpetual futures contract prices close to the index prices. Based on the difference between the perpetual market and the spot market, Bitget users will either receive or pay fund fees to the counterparty every 8 hours, i.e. three times a day. If the fund fee is positive, the long position will pay the short and vice versa.
(5) Activities and Liquidity
As Bitget ranks third globally in terms of liquidity, our users are entitled to expect a seamless experience with us. Bitget’s existing user base is very active as well with a daily trading volume of US$10 billion on average.
(6) Automation
Bitget users are given the four conditional functions of Limit Order, Trigger Order, Stop Loss and Take Profit to automate their transactions. We have recently established a meaningful partnership with CryptoHero, thus making automated TUSDT">bot trading available on our platform.
Related articles:
The Complete Guide to USDT-Margined Futures on Bitget
The Ultimate Guide to Bitget’s Coin-Margined Futures
Bitget One-Click Copy Trade
Launched in 2020, Bitget Copy Trading is a game-changer for the crypto industry. Anyone can trade like a professional, “their win is your win”. Bitget Copy Trading is designed to target all types of investors, especially beginners.
Bitget Copy Trading also has a distinctive incentive scheme for the contributions of traders: They can receive up to 10% of their followers’ profits, conveniently generating a novel stream of passive income. The rest, of course, stay put in the followers’ account. Followers have the chance to start trading crypto right away without prior understanding of the field.
The trader pool on Bitget Copy Trading is continuously growing. They are ranked by various categories for easy choosing. Users can pick their favourite trader(s) based on followers’ general opinion (popularity, followers) or traders’ financial metrics (total equity, ROI, profit/loss ratio, win rate, AUM).
Bitget is indeed the world’s largest digital copy trading exchange, where over 80,000 professional traders have accumulated a total profit sharing of US$20 million from their 380,000 followers. Our design philosophy motivates the entire network to look out for each other in terms of profit maximisation.
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