Perpetual futures, also known as perpetual swaps, are a type of derivative contract commonly used in the cryptocurrency market. They allow traders to speculate on the future price of an underlying asset, such as Bitcoin or Ethereum, without an expiration date. This makes them different from traditional futures contracts, which have a fixed expiry date and need to be settled or rolled over at that time.
Going long and going short are two crucial concepts in trading.
Going long, also known as buying, is a strategy where traders purchase an asset with the expectation that its value will increase over time. On the other hand, going short, also known as selling short, is a strategy where traders sell an asset with the expectation that its value will decrease over time. This strategy is often used in the market by traders who believe that a particular asset is overvalued and will eventually decrease in price.
To go short, traders usually borrow assets from someone else and sell them or, to repurchase them at a lower price in the future.
Here are some essential things to take note of before beginning your trading adventure: