Crypto perpetual futures contracts trading: what you should consider


  • Perpetual futures can’t be traded for long
  • Trading also requires some level of expertise and knowhow

Everybody is now trading in altcoins, and they are mostly doing it through perpetual funds. However trading through this method poses a lot of unknown factors that one must take into consideration.

Here, we look at those factors you should take into consideration before you trade using perpetual futures contract:

  • Don’t trade perpetual futures position for long

Leveraging when you are trading usually results in a stronger wick. These kinds of moves usually may not result in a forced liquidity, however, there is every tendency that those wicks could become errant.

Due to the possibility of errant wicks, investors are advised not to trade their perpetual futures for an extended period.

Perpetual futures will not allow you stake or lend your altcoins

Many do not know this but when you buy altcoins through futures, you will be unable to stake or lend with them.

Investors that are looking to trade for an extended period have to take this into consideration before getting into any trade as this might affect their decision making process.

This decision however is not necessary especially when you are trading for only a short amount of time.

  • Funding rates are prone to fluctuations 

Usually, funding rates make sure that there are no risk balances in the exchange. This is because, at all times, buyers and sellers’ interests are always equal, however, the leverage tends to vary.

For instance, if buyers are requesting more leverage, then the funding rate would turn positive. What this means is that buyers would be footing the bill of the transaction fees.

Perpetual futures trading can be fun and can be very profitable. Traders who are experienced and know how to read the market well would be able to garner the expected level of gains. 

But, traders have to pay attention to the states points above as it could have an effect on how their tradings work.

Kamsi King

Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.

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