What does it mean to speculate on currency sustainability?

The currency speculation perpetual contract is a leveraged cryptocurrency derivatives trading tool that allows long and short transactions without expiration restrictions. Using leverage to enlarge the position can increase profits but at the same time increase risks. Pay attention to liquidation risk, leverage risk and Challenges posed by price fluctuations.

Perpetual Contract for Coin Speculation

What is a Perpetual Contract for Coin Speculation?

Cryptocurrency Perpetual Contracts are a cryptocurrency derivatives trading tool that allow traders to bet on the price movement of cryptocurrencies in a leveraged manner without owning the underlying asset during the trading period.

Features of perpetual contracts:

• No expiry date: Unlike futures contracts, perpetual contracts have no clear expiration date and traders can hold positions indefinitely.
• Leveraged Trading: Traders can use leverage to enlarge their positions, which can increase potential profits but also increases risk.
• Two-way trading: Traders can go long (betting on prices going up) or short (betting on prices going down).

How perpetual contracts work:

Traders open a perpetual contract position on the exchange and select the leverage multiple. The exchange maintains a fund pool, and traders' profit and loss positions are reflected in the fund pool. If a trader makes a profit on a price move, the pool increases; if a trader loses, the pool decreases.

Advantages of perpetual contracts:

• No expiry limit: Traders can hold positions longer.
• High Leverage: Use leverage to increase your potential profits.
• Two-way trading: Traders can profit from both rising and falling prices.

Perpetual contract risk:

• Liquidation risk: If a trader’s position loses too much, the exchange may liquidate it to reduce losses.
• Leverage risk: Leverage trading will magnify profits and losses and increase risks.
• Price Volatility: Cryptocurrency prices are highly volatile, which can lead to significant losses.

The above is the detailed content of What does it mean to speculate on currency sustainability?. For more information, please follow other related articles on the PHP Chinese website!