What's the difference between Perpetual and Quarterly Futures trading?

Twentyonepaylots

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Quote from: LeGaulois on June 26, 2020, 04:17:49 PM

It's simple. A Future contract is basically when buy/sell a currency (or something else) at a predetermined price on a selected date in the future.

- Quarterly Futures contract => expires after a 3 months period (4 quarters per year, 1 quarter=3months)
- Perpetual Futures => it does not have an expiry date unlike traditional forms of futures contracts. It can be perpetual

This answers your question in all.

but to add on futures trading, you must taken consideration the leverage. If you try to do a quarterly futures contract, then you should be having less than 25x I suppose, even a 5x will do for that very long time but this does not guarantee you that it won't be liquidated it is still depends on how the market will move. Now I'm looking into quarterly futures trading, is it too risky than having short with high leverage?

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Quote from: kakonhat on June 28, 2020, 04:47:23 AM

Quote from: LeGaulois on June 26, 2020, 04:17:49 PM

It's simple. A Future contract is basically when buy/sell a currency (or something else) at a predetermined price on a selected date in the future.

- Quarterly Futures contract => expires after a 3 months period (4 quarters per year, 1 quarter=3months)
- Perpetual Futures => it does not have an expiry date unlike traditional forms of futures contracts. It can be perpetual

Answer was very simple but very helpful.
Thanks.

To add a bit more precision, perpetual contracts are called "swaps" (not futures) because unlike futures contracts, they don't settle at a future date. Instead, perpetual swaps charge swap holders periodic interest (usually every 8 hours) to keep the market pegged to the spot index. That means when bulls drive the price above spot, interest rates on longs go up. When bears drive the price below spot, interest rates on shorts go up.

Futures, on the other hand, often diverge from spot prices. During strong uptrends, there will be big premiums above spot. During strong downtrends, they will trade at a significant discount.

In my view this tends to make futures optimal for longer term trading (when you plan to hold for weeks or months at a time) whereas perpetual swaps are better suited for short term due to the constant interest charges.

kakonhat

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Quote from: LeGaulois on June 26, 2020, 04:17:49 PM

It's simple. A Future contract is basically when buy/sell a currency (or something else) at a predetermined price on a selected date in the future.

- Quarterly Futures contract => expires after a 3 months period (4 quarters per year, 1 quarter=3months)
- Perpetual Futures => it does not have an expiry date unlike traditional forms of futures contracts. It can be perpetual

Answer was very simple but very helpful.
Thanks.

LeGaulois

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Top Crypto Casino

It's simple. A Future contract is basically when buy/sell a currency (or something else) at a predetermined price on a selected date in the future.

- Quarterly Futures contract => expires after a 3 months period (4 quarters per year, 1 quarter=3months)
- Perpetual Futures => it does not have an expiry date unlike traditional forms of futures contracts. It can be perpetual

kakonhat

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Crypto in my Blood

I did Google, Youtube search to learn the difference between Perpetual futures and Quarterly futures trading account but I didn't get. Even I asked someone at a webinar but I didn't understand his talking. However, can anyone teach me about those trading difference? If there will have example in teaching it will be easy to understand for me.
Thanks in advance.

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