Basics of Perpetual Trading

A Perpetual Futures (Perps) contract is a derivative financial contract without an expiry date that allows traders to speculate on the underlying price movement with leverage, without owning that underlying

Key advantages of perps trading vs spot trading:

  1. Possibility to long or short: If you hold a token in the spot market, you can benefit only from its potential price appreciation. On the other hand, Perpetual Futures contracts allow you to profit from price movements in either direction: you can bet that the price of BTC will fall by entering a short BTC-PERP position and profit from its downtrend.

  2. Leverage: If BTC price is at 25,000 USDC, on the spot market, you can only afford to buy 1 BTC if you have 25,000 USDC in your balance. However, with a 5x leverage on the BTC-PERP contract, you can open 1 BTC-PERP contract on Sharpe Perp with only 5,000 USDC as collateral. Perpetuals make trading more capital efficient

  3. Liquidity: The futures market volume surpasses spot trading volume by far, allowing users to access deeper liquidity and trade with minimal price impact.

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