Hello Steemian, in the third post on #poloniexspotlight we are going to deal with a very useful service for some Poloniex's users which requires such experience and a lot of advices namely Futures, good reading for all!
Most of the cryptocurrency traders and investors got their first investment in cryptocurrencies through direct or indirect purchase of Bitcoin, which means an immediate transaction, i.e. buying and selling in the simplest form (the simplest type of trading) but there is another type of trading namely futures contracts.
From the name it becomes clear that it is a group of futures contracts carrying an agreement between two parties to buy or sell a digital currency at a specific price on some future date. These contracts carry a set of standard criteria such as quantity, price, date ...
Both the buyer and seller are legally obligated to respect the terms of the contract at the time of expiration.
Traders mainly use futures contracts for three reasons:
Hedging : used against future price changes.
Price speculation : used to increase profit.
Trade with Numberx leverage : You don't need to put up Number% of the contract's value amount when trading.
What are "perpetual" futures?
A perpetual contract is a derivative that is similar to a traditional futures contract (an agreement to buy or sell a commodity at a predetermined price at a specific time in the future), but with one major difference ： unlike futures contracts, perpetual contracts do not have an expiration date. So you can keep a position as long as you want.
In addition, perpetual contracts mimic the spot market on margin and therefore trade near the price index. This allows you to amplify the outcome of the transaction, but also means that a drop in the price of a commodity equal to your initial margin (the percentage of total funds you have provided as collateral) will automatically liquidate your capital and close.
Futures contracts with Poloniex
The arrival of Poloniex in the futures market is no surprise: this type of derivative product is particularly popular in recent months.
Poloniex negotiators can use this service on the web, on mobile or via APIs that we will demonstrate its process after.
Traders will be able to use Bitcoin (BTC) and Ethereum (ETH) perpetual swaps with leverage up to x100 and 5 other cryptos with leverage up to x50.