Phemex Perpetual Futures
A Perpetual Futures is a derivative product that is similar to a traditional Futures Futures (an agreement to buy or sell a commodity at a predetermined price at a specified time in the future), but with one main difference: contrary to Futures, Perpetual futures do not have an expiry date, so you can hold a position for as long as you like. In addition, perpetual futures mimic the margin-based spot market and hence trade close to the Index Price. This allows you to amplify the outcome of the deal, but it also means that a decrease in the price of a commodity equal to your initial margin (the percentage of the total Funds you provided as a collateral) will automatically liquidate your equity and close your position.
BTC Perpetual futures and USD Perpetual futures.
At Phemex, users can use two different base currencies to trade all futures. For futures based on BTC, each futures is worth 1 USD of Bitcoin (1USD/current BTC price). Profits and Losses are calculated in terms of the futures's BTC value. Profits are equal to the difference between the futures’s value at Open Price (1USD/Open BTC price) and the futures’s value at Close Price (1USD/Close BTC price), times the Quantity. Losses are equal to the difference between the futures’s value at Close Price (1USD/Close BTC price) and the futures’s value at Open Price (1USD/Open BTC price), times the Quantity. Both functions are nonlinear, meaning that both do not have a constant rate of change. For USD based futures, instead, the value of each futures is not predetermined. For instance, in ETHUSD futures, each futures is worth the equivalent of 0.005 ETH, and for XRPUSD, each futures is worth the equivalent of 5 XRP. Profits and Losses are calculated based on the value of the futures in USD: both equal the difference between Close Price and Open Price, times the Quantity. Both functions evolve in a linear manner, having constant rates of change.
How to Start Trading futures
First you must transfer funds into the corresponding futures trading account. Different futures trading accounts support different asset types. For example, a BTC futures trading account needs BTC to be transferred from your spot wallet. Since Phemex does not currently support USD deposits, to transfer into a USD futures trading account you must first convert assets into USD in your spot wallet. After funds are transferred from spot wallet to futures trading account, you can begin to trade futures.
