What are cryptocurrency perpetual contracts?

All contracts on Bittam are perpetual contracts, offering cryptocurrency trading with leverage up to 200x.

A perpetual contract in cryptocurrency trading is a derivative contract without a fixed expiration date, allowing traders to open or close positions at any time without delivering physical assets. Unlike traditional futures contracts, perpetual contracts have no specific expiration date, so they can be held indefinitely until the trader chooses to close the position. These contracts allow traders to profit from both rising and falling asset prices.

Key characteristics of perpetual contracts include:

No Expiration Date: Perpetual contracts have no settlement date and can be held indefinitely until the trader decides to close the position.

Price Tracking: The contract price typically tracks the real-time price of the underlying asset to maintain market consistency.

Funding Rate: To ensure the contract price follows the underlying asset price, perpetual contracts may incur periodic funding rates.

Leveraged Trading: Traders can use leverage to amplify their positions and increase potential returns, but this also exposes them to greater risk.

Liquidation Mechanism: To prevent excessive account liabilities, perpetual contracts typically include a mandatory liquidation mechanism to ensure that the contract does not result in a negative balance.

These contracts are widely used on cryptocurrency exchanges, providing traders with greater flexibility and more diverse trading options.