- Traders may profit from both bull and down markets using perpetual futures.
- Going long on Ether futures may help investors benefit from increasing ETH prices.
The value of the Ethereum Perpetual Contract, or any futures or perpetual contract, is derived from the contract’s underlying currency, which is Ethereum. The contract’s price is directly linked to the cost of Ethereum. Perpetual contracts allow the parties to remain in their current positions indefinitely. The Index price of Ethereum is used as a basis for constant futures trading. Asset prices and trading volume are used to compute an index’s price.
If they believe the price of Ether will climb in the future, a buyer may elect to purchase it, whereas a seller may decide to enter into a contract if they believe the price will decline. Perpetual contracts, like Futures, contain built-in leverage that increases the returns. The buyers and sellers of Ether are allowed to take long or short positions depending on their risk profile and judgement. Instead of merely benefiting from the Bull Run, traders may profit from both bull and down markets using perpetual futures.
Two Margins to Consider
When it comes to Ether Perpetual Contracts, there are two margins to consider: initial and maintenance. In Perpetual Future Contracts, the initial margin is the least amount a trader must pay to initiate a leveraged position. Margin trading describes the process. It is possible to trade more than one’s eligibility allows for in margin trading by putting down collateral instead of the margin amount.
Going long on Ether futures may help investors benefit from increasing ETH prices. Similarly, if the price of ETH falls, one may benefit by taking a short position. Traders can benefit from any market circumstances thanks to this aspect of futures trading compared to purchasing Ether directly. If the price of Ether drops, one has two options: sell the Ether or lose money. As trading in the spot market, you can’t benefit from declining prices.
