ETH/USDT perpetual contracts
ETH/USDT Perpetual Contracts
ETH/USDT perpetual contracts are a popular type of crypto futures trading that allows traders to speculate on the price of Ethereum (ETH) without actually owning the asset. These contracts are settled in USDT (Tether), a stablecoin pegged to the US dollar, and they do not have an expiration date, making them "perpetual." This guide will help beginners understand how to trade ETH/USDT perpetual contracts, manage risks, and get started on platforms like Bybit and Binance.
What Are ETH/USDT Perpetual Contracts?
ETH/USDT perpetual contracts are derivatives that track the price of Ethereum. Unlike traditional futures, these contracts do not expire, allowing traders to hold positions indefinitely. The contract price is tied to the spot market price of ETH, with adjustments made through a mechanism called funding rate. This ensures the contract price stays close to the underlying asset’s price.
How to Get Started
To start trading ETH/USDT perpetual contracts, follow these steps:
1. **Register on a Trading Platform**: Sign up on a reputable exchange like Bybit Registration or Binance Registration. 2. **Deposit Funds**: Fund your account with USDT or other supported cryptocurrencies. 3. **Learn the Interface**: Familiarize yourself with the trading platform’s interface, including order types like market order, limit order, and stop-loss order. 4. **Start Small**: Begin with small trades to understand how the market works.
Example Trade
Let’s say the current price of ETH is $2,000, and you believe it will rise. You decide to open a long position on an ETH/USDT perpetual contract with 10x leverage. Here’s how it works:
- **Entry Price**: $2,000 - **Leverage**: 10x - **Position Size**: 1 ETH (equivalent to $2,000) - **Margin**: $200 (10% of the position size)
If the price of ETH rises to $2,200, your profit would be: ($2,200 - $2,000)
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