What is a virtual currency perpetual contract transaction

Virtual currency perpetual contracts are a high-risk, high-yield trading method, with no expiration date and leverage available. Key concepts include leverage, margin, mandatory closing and funding rates. Suitable for experienced traders with strong risk tolerance. Novice should start with small amounts of funds and low leverage, set stop loss, and continue to learn. Perpetual contracts provide opportunities to go long and short, but remember that risks and returns coexist!

Virtual Currency Perpetual Contract Trading is a popular way of trading cryptocurrency derivatives that allows traders to speculate on the price of the underlying asset without actually owning the cryptocurrency. Unlike traditional futures contracts, perpetual contracts have no expiration date, which means you can hold the contract indefinitely as long as your account maintains sufficient margin. This mechanism not only brings convenience but also contains higher risks.

What is a perpetual contract?

A perpetual contract is essentially a contract that is based on the price of a cryptocurrency (such as Bitcoin or Ethereum). You can choose to "go long" (forecast price increases) or "short" (forecast price decline). With leverage, you can control a larger value contract with relatively little money. For example, if you use 10x leverage, you only need $100 margin to control a $1,000 Bitcoin contract.

Mainstream Bitcoin Exchanges in 2025:

Ouyi official website:

Binance official website:

gate.io official website:

bitget official website:

Sesame Open Door Official Website:

Key concepts of perpetual contracts:

• Leverage: Amplify the scale of your trading, but also magnify the risks. High leverage means higher potential gains, but also higher potential losses.
• Margin: The funds you need to deposit as collateral for holding the contract.
• Forced liquidation: If your account balance is below the maintenance margin level, your position will be forced to liquidate and you will lose your margin.
• Funding Rate: The price of a perpetual contract will be affected by the spot market price. To ensure that the perpetual contract price is consistent with the spot price, the exchange charges or pays the funding rate. If the capital rate is positive, the long person pays it to the short seller; if the capital rate is negative, the short person pays it to the long seller.
• Mark Price: Used to calculate the forced closing price, usually referring to the spot price of multiple exchanges to avoid wrong closing positions due to abnormal price on a single exchange.

Advantages of Perpetual Contracts:

• No need to worry about expiration date: No need to move positions as frequently as traditional futures contracts.
• Hedging risk: It can be used to hedge the risk of spot holdings.
• High leverage: You can control larger transaction sizes with less funds.
• Two-way profits from long and short: There are opportunities to make profits regardless of whether the market rises or falls.

Risks of Perpetual Contracts:

• High leverage: While amplifying returns, it also amplifies risks, which may lead to rapid losses and even liquidation.
• Forced closing: Market fluctuations may cause the account balance to be lower than the maintenance margin, triggering forced closing and losing all margin.
• Funding rate: Continuous payment of funding rates will erode your profits.
• Market volatility: The cryptocurrency market fluctuates violently, and prices may fluctuate significantly in a short period of time, resulting in losses.

Who is a perpetual contract suitable for?

Perpetual contract trading is relatively risky and is not suitable for beginners. Suitable:

• Experienced traders: Be familiar with the market and understand the risks of leveraged trading.
• People with strong risk tolerance: Be able to withstand potential losses.
• People who can strictly implement risk management strategies: For example, setting stop loss orders and controlling position size.

Suggestions for beginners:

• Start with small funds: First use small funds to conduct simulated transactions or real-time transactions, and be familiar with the trading mechanism.
• Use low leverage: Try to choose a lower leverage multiple to reduce risk.
• Setting a stop loss order: Stop loss order can help you automatically close the position when the market price reaches the preset loss level and control risks.
• Understand the capital rate: Pay attention to changes in the capital rate to avoid being eroded by high capital rate.
• Don’t be greedy: Stop profits in time when making a profit, and stop loss in time when losing.
• Learn: Continuous learning to improve trading skills and risk management capabilities.

Summarize:

Virtual currency perpetual contract trading is a high-risk and high-yield trading method. While it provides high leverage and no expiration date, it is also accompanied by risks such as forced closing and funding rates. Be careful to start with small amounts of funds, use low leverage, and strictly implement risk management strategies. Only by fully understanding the risks and being fully prepared can you succeed in the perpetual contract market.

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