As perpetual futures have no set expiry they are, in a way, similar to spot exposure. To ensure that perpetual prices are kept in line with the spot market, the contracts have an exchange of payment between buyers and sellers depending on where the future price is trading relative to the underlying spot price. At EQUOS, we refer to the spread between spot and perpetual futures prices as Basis. Other platforms may refer to this value as funding, which is the equivalent practice.
Margin: the advantage of trading a perpetual future over a spot contract is that perpetuals offer the trader the ability to trade on margin: Rather than having to fund the full notional of the trade(the USDC value of the position) , the trader has the option to put down only part of the notional in margin. Therefore, trading perpetuals is more capital efficient. We will explain more about margin in the next section.
No need to own the underlying: a perpetual future is a derivative, which means that the payoff of the contract is based on the underlying asset, such as Bitcoin BTC, but there is no need to own the underlying itself. Any profits and losses will be settled directly in USDC in your account.
Ability to trade both directions: traders can buy (go long) or sell (go short) perpetual futures, therefore they can benefit from prices going up as well as prices going down. This cannot be easily done when trading the underlying directly.
Risk management: traders can use perpetual futures to hedge positions.
Download the full perpetuals guide from the EQUOS Archives homepage.
Trade perpetuals here: EQUOS.io.
The core utility of EQUOS Origin (EQO) is around enhanced earning power on assets held in “Earn” accounts on the EQUOS platform and in Digivault wallets.
Cryptocurrency markets are famous for their inherent volatility, yet they are also no stranger to quieter periods. In fact, Bitcoin (BTC) spent almost two months in the summer of 2020 locked in a stubborn trading range between $9,000 and $10,000. The number-one cryptocurrency almost resembled a stablecoin with its uncharacteristic lack of volatility during that time. So, how do traders learn to trade in sideways markets and capitalize on the smallest fluctuations in an asset's price? Here are a few tips.
As we explained in the previous sections in this guide, an account is only able to send new orders as long as its Total Account Margin is higher than the Initial Margin required for all open positions and open orders. As soon as the Total Account Margin drops below the Initial Margin, the account can no longer send any new orders unless such order would reduce the existing position (e.g. a sell order, when the current position is long). To continue adding positions (e.g. add buy orders, when the current position is long), the trader will have to transfer additional funds that can be used for margin to their wallet, close open orders, or close open positions.