Perpetual contracts are a type of "innovative" futures contract. Unlike traditional contracts with expiration and settlement dates, perpetual contracts have no settlement date and can be held indefinitely. They are thus named perpetual contracts. Settlement occurs every 8 hours, at 00:00, 08:00, and 16:00 (UTC) daily.
Venkate Offers Two Types of Contract Trading Modes
USDT-Margined Contracts (Forward Contracts): These support perpetual contracts and are settled in USDT.
Coin-Margined Contracts (Reverse Contracts): These support perpetual contracts and are settled in cryptocurrency.
Features of USDT-Margined Contracts
Settled in USD-Pegged Asset: The contracts are priced and settled in USDT.
Clear Pricing Rules: Each contract specifies the delivery quantity of the underlying asset per contract unit.
Advantages of USDT-Margined Contracts
USDT-margined contracts are linear contracts quoted and settled in USDT. The main advantage is the ease of calculating returns in fiat currency. For example, 1 USDT is roughly equivalent to 1 USD, making it easy to calculate that earning 500 USDT in profit translates to approximately 500 USD.
Additionally, using USDT as a universal settlement currency significantly enhances trading flexibility. Multiple futures contracts can use the same settlement currency (e.g., BTC, ETH, XRP), eliminating the need to purchase the underlying tokens for contract positions. Trading with USDT also avoids extra currency conversion fees.
In times of market volatility, USDT-margined contracts can effectively reduce the risk of large price swings, eliminating concerns about the risk exposure of hedging contract margin.
Features of Coin-Margined Contracts
Settled in Cryptocurrency: These contracts are priced and settled in the underlying cryptocurrency, with no need to hold stablecoins as margin.
Coin-margined perpetual contracts are digital asset derivatives where users can speculate on price movements by going long or short. The price is close to the reference index price of the underlying asset, anchored mainly by the funding fee mechanism.
Without an expiration date, users can hold perpetual contracts indefinitely. Realized and unrealized profits and losses are settled into the user's account balance every 8 hours.
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