Difference between revisions of "Funding rates"

Funding rates (view source)

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Revision as of 07:17, 27 April 2022 (view source) Jimcrypted (talk \| contribs) (first edit) Tag: Visual edit		Revision as of 07:17, 27 April 2022 (view source) Jimcrypted (talk \| contribs) m Tag: Visual edit Newer edit →
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	On ~~cfypto~~ marktes perpetual futures or '''perps''' are contracts that never expire. You can buy as many perpetual futures as you like, you won’t ever take delivery of the underlying cryptocurrency. Therefore, there needs to be some other mechanism to ensure the perpetual future trades as close to the spot price as possible.		On crypto marktes perpetual futures or '''perps''' are contracts that never expire. You can buy as many perpetual futures as you like, you won’t ever take delivery of the underlying cryptocurrency. Therefore, there needs to be some other mechanism to ensure the perpetual future trades as close to the spot price as possible.

	The exchanges use a mechanism called funding, a payment between those who have gone long on the perp and those who have gone short, to ensure that the perpetual prices converge to spot.		The exchanges use a mechanism called funding, a payment between those who have gone long on the perp and those who have gone short, to ensure that the perpetual prices converge to spot.