What does perpetual currency speculation mean?

Perpetual currency speculation contract is a cryptocurrency derivative instrument that provides leveraged trading, permanent positions and high liquidity. The contract is perpetual, requires no expiration date, and provides high leverage, but its risks include amplified losses caused by high leverage, the impact of perpetual funds on yields, and the inherent volatility of the cryptocurrency market.

Perpetual Coin Speculation Contract: In-depth Understanding

1. What is Perpetual Coin Speculation Contract?

Perpetual currency speculation contract is a cryptocurrency derivatives contract that allows traders to conduct leveraged transactions on the price of the underlying cryptocurrency without owning actual assets. It is similar to a traditional futures contract, but with the following key differences:

• No expiry date: The contract is perpetual and does not expire on a specific date, allowing traders to hold positions indefinitely.
• Leverage: Contract perpetual offers high leverage, allowing traders to trade larger positions with smaller capital.
• Perpetual Funding: Since the contract has no expiration date, traders need to pay or receive perpetual funds to maintain the balance between the contract price and the spot price.

2. How does the perpetual currency speculation contract work?

Contract perpetual trading involves the following steps:

1. Select a contract: Select the underlying cryptocurrency you wish to trade and the leverage level.
2. Open a position: Determine the trading direction (long or short) and specify the margin.
3. Hold a position: According to market price changes, hold a position and adjust margin as needed.
4. Close a position: When you reach your expected profit or loss target, close your position and exit the trade.

3. Advantages of perpetual currency speculation contracts:

• Leveraged trading: High leverage allows traders to amplify their profit potential with smaller capital.
• Perpetual position holding: Hold the position indefinitely to avoid the risk of being forced to close the position due to contract expiration.
• High Liquidity: Cryptocurrency contract perpetual markets usually have high liquidity, making entry and exit transactions easy.

4. Perpetual risks of currency speculation contracts:

• High leverage risks: Leveraged transactions will amplify losses. If the market fluctuates violently, it may lead to huge losses.
• Perpetual Funding: Traders need to pay or receive perpetual funding, which may affect the overall rate of return.
• Market Volatility: The cryptocurrency market is extremely volatile and can result in rapid and unpredictable price changes.

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