What is the purpose of futures products?

The financial market relies heavily on futures products.This product offers three main benefits.
They were primarily developed for risk management and hedging.Short exposure offers traders another advantage because they can bet against an asset's performance even though they do not have direct exposure to it.Another advantage is leverage, which lets traders take on positions that are larger than their account balance.
4.Can you simplify the operation of perpetual futures?
A particular kind of futures contract is known as perpetual futures.
Because they don't have an expiration date like traditional futures, traders can keep a position open for as long as they want.
Aside from that, their trading is based on the price of an underlying index.This consists of an asset's average price based on the relative trading volume of the major spot markets.
As a result, perpetual futures are frequently traded at a price that is very comparable to spot markets, in contrast to conventional futures.However, the marked price may differ from the spot market price in extreme market conditions.
Liquidity is the speed and efficiency with which an asset can be purchased or sold without affecting its price, and it is essential for any financial market.Buyers and sellers can find other traders and conduct transactions at the prices they prefer in a market with greater liquidity.On the other hand, lower liquidity might make it more difficult to carry out transactions, which would raise the bid-ask spread.