Futures is an agreement to trade a particular commodity or financial instrument at a predetermined price at a specified time in the future. In futures, both counterparties have their obligations and rights.
For example: Both counterparties agree on 10 contracts of the delivery of coffee bean at the price of $5000. Then the buyer has an obligation and right to buy 10 tons of coffee bean at the price of $5000 on a specific date. At the same time, the seller has an obligation and right to sell 10 tons of coffee beans at the price of $5000 on the same date. The contract that represents the obligations and rights of both counterparties is futures.
But most of the time, investors do not ask for physical delivery. Instead, before the contract expires, which is also prior to the delivery day, investors will close the position to profit from the price difference.
What’s Perpetual Swap?
BitMart currently offering Perpetual Swap which refers to a kind of derivative that is similar to a traditional future and can provide high leverage. Perpetual Swap has no delivery and expiry dates. As they don’t expire, a funding mechanism is adapted to anchor the perpetual swap price to the spot price.
A funding fee is exchanged every 8 hours at 00:00, 08:00, and 16:00 (UTC) daily. If you close your position prior to the funding time, you will not need to pay nor receive funding fees. When the funding rate is positive, the longs pay the shorts. When it is negative, the shorts pay the longs. (BitMart does not charge any fees in the funding process. The funding fee is exchanged directly between counterparties.)
What’s USDT-margined Futures
Now, BitMart provides USDT-margined futures which also called linear futures. It is settled in USDT and the underlying asset is the USDT index of the underlying cryptocurrency (for example, the underlying asset of a BTC perpetual swap is the BTC/USDT index). The face value of a perpetual swap is in the unit of its underlying asset. For example, the face value of a BTC swap is 0.0001 BTC and an ETH swap is 0.01 ETH.
Since the perpetual swaps are margined in USDT, users can flexibly allocate the margins between different swaps without worrying about the price fluctuation of the underlying assets. Moreover, the profit and loss calculation of USDT-margined futures is much easier.
ATTENTION: Cryptocurrency investment is subject to high market risk. Please make your investments cautiously. This is not investment advice, or an endorsement by BitMart as to the intrinsic value of a digital asset, or a commitment by BitMart team to support any speciﬁc asset/token that the announcement pertains to.