Understanding Perps: An Insight into Crypto's Popular Trading Instrument
Perps, which launched on BitMEX in 2015, have become one of the most traded financial products in the world.
Perpetual contracts, commonly known as perps, have been making waves in the crypto trading world as a popular financial instrument. With their introduction on BitMEX in 2015, perps have garnered a significant following and are now considered one of the most traded products globally. These contracts offer traders the opportunity to speculate on the price movements of various cryptocurrencies without an expiration date, providing a more flexible trading experience.
Perps derive their value from the underlying asset, allowing traders to go long or short on the market. This flexibility has contributed to the increasing popularity of perps among both retail and institutional investors. The leverage offered by these contracts enables traders to amplify their positions and potentially generate higher returns, albeit with increased risk.
Despite their popularity, perps come with their own set of risks, including liquidation and funding rates. Traders need to carefully manage their positions and implement risk management strategies to navigate the volatile crypto market successfully.