What is the difference between futures and perpetual?

Perpetual futures are cash-settled, and differ from regular futures in that they lack a pre-specified delivery date, and can thus be held indefinitely without the need to roll over contracts as they approach expiration.

What is the difference between a futures option and a futures contract?

The key difference between futures and options is that futures contracts require you to buy or sell the commodity, where futures options give you the right to buy or sell the futures contract without the obligation.

What are the two types of futures contracts?

Futures traders can approach futures contracts in two ways: hedging and speculating. Hedgers: Hedgers use futures contracts to protect themselves from the price movement of an underlying asset.

How long can you hold a perpetual future?

1) True to their name, Perpetual Future Contracts, are a special, unending type of advanced Futures Contracts, that do not have a specified expiry date which means that the traders viz. buyer and seller can hold the position for as long as they wish to.

What’s the difference between perpetual and spot?

Spot trading requires immediate settlement and future contracts require settlement on a specified future date. Perpetual contracts, on the other hand, do not have an expiry date, providing a hassle-free trading environment for all traders.

What is the difference between options and option contracts?

An options contract is an agreement between two parties to facilitate a potential transaction involving an asset at a preset price and date. Call options can be purchased as a leveraged bet on the appreciation of an asset, while put options are purchased to profit from price declines.

What are the contract specifications for a futures contract?

Each futures contract specifies is the quantity of the product delivered for a single contract, also known as contract size. For example: 5,000 bushels of corn, 1,000 barrels of crude oil or Treasury bonds with a face value of $100,000 are all contract sizes as defined in the futures contract specification.

How does a perpetual contract work?

Perpetual contracts are derivative contracts similar to futures that have no expiration date or settlement, allowing them to be held or traded for an indefinite amount of time. Unlike futures, perpetual contracts trade close to the index price of the underlying asset due to perpetual funding rates.