Futures
trading · derivatives
Futures are derivatives for long or short exposure to an asset; crypto markets commonly use perpetual futures with no expiry.
1.concept
Crypto futures allow traders to gain long or short exposure without holding the underlying asset. Standard futures expire on a set date; perpetual futures have no expiry and use funding payments to track an index price.
2.mechanics
Key elements include margin, leverage, liquidation thresholds, mark price, and maintenance requirements. Exchanges use insurance funds and auto-deleveraging mechanisms to handle bankrupt positions.
Related terms
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