Detailed explanation of currency contracts
Jul 29, 2025 pm 02:51 PM
The core points of currency circle contract trading include: 1. The contract types are divided into perpetual contracts (no expiration date, spot is anchored by capital fee rate) and delivery contracts (with fixed settlement date, automatic closing of positions upon maturity); 2. The leverage is usually 1-125 times, and the margin is divided into position by position (independent risk) and full position (shared risk). For example, 1,000 USDT under 10 times leverage can control USD 10,000 USDT positions; 3. Trading directions include long (bulking profit) and short (bearing profit); 4. The risk mechanism includes forced closing (forced closing position when margin is insufficient) and automatic reduction of positions (platform intervention in extreme market conditions); 5. The perpetual contract has a capital fee rate, which is settled every 8 hours, and is used to balance long and short positions; 6. The formula for profit and loss calculation is: profit and loss = (closing price - opening price) × contract quantity × Contract face value × direction (long/short); 7. Common strategies include short-term high frequency (fast in and out to distribute stop loss) and hedging arbitrage (combined with spot hedging), and high leverage risk is required. It is recommended that a single risk be controlled within 5% of the principal; 8. When choosing a platform, mainstream exchanges such as Binance, OKX, and Huobi should be given priority to pay attention to their liquidity, handling fees and security; Summary: Contract trading returns are high but the risks are extremely high, and it is suitable for experienced people. Novice recommends simulation practice first and strictly abide by risk control rules.
Detailed explanation of currency circle contract trading
Currency contract trading is a derivative transaction that uses leverage to amplify returns (or losses), which is mainly divided into perpetual contracts and delivery contracts . The following are the core points:
1. Contract Type
Perpetual contract : There is no expiration date, the capital rate mechanism makes the price anchored to spot, which is suitable for long-term holdings.
Delivery contract : There is a fixed settlement date and the position is automatically closed after expiration, which is divided into weekly contracts, quarterly contracts, etc.
2. Leverage and margin
Leverage is usually 1-125 times (different platforms are different), margin is divided into positions per position (single position independent) and full position (shared margin).
For example: under 10 times leverage, you can open a 10,000 USDT position with 1000 USDT, and the profit and loss can be magnified by 10 times.
3. Trading direction
Go long : Buy bullishly, and the price rises and make profits.
Short selling : sell bearishly, and the price falls to make a profit.
4. Risk mechanism
Forced closing (liquidation) : When the loss causes the margin to be lower than the maintenance margin, the system forces the position to be closed.
Automatic positions reduction : In extreme market conditions, the platform may reduce positions to reduce risks.
5. Funding rate (perpetual contract)
Settlement every 8 hours, long or short pay fees to balance market long and short positions.
6. Profit and loss calculation
formula:
Profit and loss = (closing price - opening price) × Contract quantity × Contract face value × Direction (long/short)
7. Strategies and risks
Short-term high frequency : Use leverage to enter and exit quickly, and strictly stop losses are required.
Hedging arbitrage : combine spot and contract hedging risks.
Risk warning : High leverage and easy to explode, and positions need to be controlled (single risk is recommended to be
8. Platform selection
Mainstream exchanges: Binance, OKX, Huobi, etc., need to pay attention to liquidity, handling fees and security.
Summary : Contract trading has high returns but great risks, and is suitable for experienced people. Novice recommends simulation practice first and strictly abide by risk control rules.
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