How to play the virtual currency perpetual contract? Tutorial for beginners on how to play the perpetual contract

The virtual currency perpetual contract is one of the most famous derivatives in the virtual currency market. In the perpetual contract, traders can hold long or short positions and bet that the price will be higher or lower than the current level. Although it is provided Additional leverage, but does not involve the immediate exchange of the underlying assets, is also one of the important reasons why it is popular with investors. And as long as investors can maintain the necessary margin for a perpetual contract, the contract can always be maintained. But as a novice, I still don’t know how to play the virtual currency perpetual contract? In fact, it is not complicated. It can currently be carried out on exchanges such as Ethereum and Binance. The following editor will introduce to you how to play the virtual currency perpetual contract.

How to play the virtual currency perpetual contract?

Virtual currency perpetual contract trading is relatively complex, and different exchanges such as Oyi, Binance, and Huobi all provide this service. Below is a brief introduction to how to trade perpetual contracts on Eureka Exchange.

1. Open the official website of OKX Exchange (click here to register), enter your email address on the homepage, click "Register", slide the slider to the right, complete the puzzle for verification, and then enter the verification code received by email , the verification code is valid for 10 minutes

2. Then enter the mobile phone number, click "Verify Now", enter the six-digit verification code received by the mobile phone, the validity time is the same 10 minutes

3. Select your country/region of residence and check the Terms of Service, "Risk and Compliance Disclosure" and Privacy Policy and Statement

4. When creating a password, you need to have a length of 8-32 characters, 1 lowercase letter, 1 uppercase letter, 1 number, 1 symbol, such as: !@ # $ %, etc.

5. After completing the identity authentication, you can conduct transactions and find "Buy Coins" on the homepage - "C2C Buy Coins"

6. Select the "Purchase" option, pay attention to select the purchase currency, and click "All Payment Methods" to filter the payment method

7. After selecting the merchant, follow the merchant's message, then enter the purchase amount, click "Buy USDT" to make the payment and wait for the merchant to release the coins (if the coins are not received after payment) After negotiating with the merchant to no avail, you can click on the page Need help>Others>Get help>Initiate a complaint)

8. If you want to conduct contract transactions, you need to Open the account mode and set it to single-currency margin mode or cross-currency margin mode.

9. You can continue to set up the contract, personalize the trading unit and order mode.

#10. You can customize the trading mode and Kanban mode. Select the professional layout here.

11. Perpetual contracts are divided into USDT margin perpetual contracts and currency-margined perpetual contracts. Here we take the USDT margin perpetual contract as an example. Similarly, transfer our digital assets from the capital account to the trading account. If it has been completed, no additional transfer operations are required.

12. On the trading page, click the drop-down button on the right side of the currency pair, enter the currency in the search box, select Perpetual in the margin transaction, and select the currency corresponding to the currency. Standard/U-based contracts. Here we take the U-based contract as an example

13. Select the account mode, order type, enter the price and quantity, and click Buy to open long (bullish) or Sell to open short ( bearish). For unfilled pending orders, you can click Cancel to cancel the order. Here we take opening a short position as an example.

14. After the pending order is completed, you can view the relevant data of the order in the position interface, such as margin, income, rate of return, estimated liquidation price, etc.

15. You can set stop-profit and stop-loss on the position interface. You can also choose to close the position. Enter the closing price and quantity to confirm the closing, or select the full market price. Complete the position closing operation.

What is the difference between virtual currency perpetual contract and leverage?

Virtual currency perpetual contracts and leverage trading are two different trading methods. Their differences mainly reflect three aspects: contract type, settlement method and risk management. The following is a detailed analysis:

1. Contract type

Perpetual contract is a futures contract that has no expiration date and can be traded continuously. The price of a perpetual contract will usually remain close to the spot price of the underlying asset, but there may be a certain spread (basis).

Leveraged trading can be conducted in the spot market or the derivatives market. In leveraged trading, traders can borrow funds to enlarge their trading positions to achieve greater profits or losses.

2. Settlement method

The settlement of the perpetual contract is carried out through the funding rate. The funding rate will be adjusted according to the difference between the contract price and the spot price of the underlying asset. If the contract price is higher than the spot price, the long position will pay a funding rate to the short position; conversely, if the contract price is lower than the spot price, the short position will pay a funding rate to the long position.

The settlement of leveraged transactions is usually based on actual fund settlement. For example, when conducting leverage trading on an exchange, the trader's account funds will increase or decrease based on the actual profit and loss.

3. Risk Management

In perpetual contracts, since there is no expiration date, traders need to pay close attention to changes in funding rates and position margins, as well as the difference between the contract price and the spot price. basis to effectively manage risks.

In leveraged trading, traders can manage risks by setting stop-loss orders, limit orders, etc. to control the extent of losses.

Perpetual contracts can be traded on both centralized and decentralized exchanges, often using self-hosted crypto wallets. For example, a trader might open a long position in a Bitcoin perpetual futures contract at $30,000 with 5x leverage. This leverage amplifies potential profits or losses, and traders are required to maintain at least 5% of the notional value as collateral, with funding rates paid every 8 hours. It should be noted that cryptocurrency perpetual contracts provide traders with a flexible trading method, allowing them to conduct leveraged transactions in the cryptocurrency market, but since leveraged trading carries higher risks, traders need to operate with caution and Make sure you understand and accept the risks involved.

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