What are BTC perpetual contract and BCH Perpetual Contract?

BTC or Bitcoin is considered the most famous cryptocurrency on the earth. It is the major cryptocurrency in the world, as well, in terms of trading volumes as well as market capitalization. Traders can margin trade Bitcoin on any Exchange by making use of their derivatives, such as a BTC perpetual contract or a BTC futures contract.

As a decentralized digital currency, it works without a single administrator or a central bank. This means that the bitcoin Peer-to-peer swap can take place without the necessity of any sort of intermediary. Trades have the liberty to trade bitcoin by going short or long with leverage.

BTC perpetual contracts are intended to offer income of the underlying Bitcoin spot market with the additional benefit of leverage. These contracts do not usually have an ending date. Moreover, the contracts are usually quoted in the currency of the United States. This means that all calculations that are pertained to margin, loss, profit, as well as the settlement are denominated in BTC.

The perpetual contracts in bitcoin are margined in BTC, meaning you are required to have BTC to deal with these contracts. The maximum allowable leverage for perpetual contracts in BTC is 100 times of the Underlying Index. The underlying index for these contracts is DEXBTUSD. It is made up of equal weighted average price of BTC/USD from coinbase, bitstamp, and kraken.

When it comes to funding, it is considered a sequence of continuous payments that are swapped between shorts and longs in a perpetual contract. This is done with the intention of keeping the price of the BTC perpetual contract tethered to the basic index.

The funding rate is equal to the difference between the the marked price and the price of the underlying index at any given time. Funding is considered an eight-hourly interest rate, is calculated, and exchange every minute. When the funding rate is encouraging, longs pay shorts. When it is depressing, shorts pay longs.

BCH, which stands for Bitcoin Cash Series, is a derivative. It enables traders to guess on the future value of the Bitcoin swap rate and Bitcoin Cash. Traders do not need to have Bitcoin Cash to buy and sell the BCH futures contract and the BCH Perpetual Contract. This is for the reason that it only needs Bitcoin as margin.

The underlying of BCH future is the BCH/XBT swap rate as recorded in the BBCHXBT Index. The BCH Futures and perpetual contracts are quoted in Bitcoin and all PNL and margin calculations are denominated in Bitcoin.

When it comes to the margin and leverage of the BCH Perpetual Contract, all of them will be posted in Bitcoin. This means that traders will be capable of going short or long the contract exploiting only Bitcoin. The maximum permitted leverage of BCH futures contracts features 20 times of the underlying index. This means that if you are a trader and would like to purchase 10 Bitcoin value of contracts, you will only need 0.5 Bitcoin of preliminary margin. When it comes to settlement, the BCH futures contracts will decide on the .BBCHXBT30M Index Price.