What are Digital Asset Perpetuals?

Trading perpetuals in digital asset involves engaging in perpetual futures contracts, which are a type of derivative product that does not have an expiration date. While these contracts do not have an expiration date, you are primarily betting on the short-term value of the digital asset. These contracts allow traders to speculate on the future price of a digital asset without owning the underlying asset. Going long on digital asset perpetuals means betting that the price of the digital asset will increase, so you profit if the price rises. Going short means betting that the price will decrease, allowing you to profit if the price drops.

When trading digital asset perpetuals, you are either taking a long or a short position on a particular asset, like Bitcoin or Ethereum for example. If you believe an asset is undervalued, you would take a long position. You would do this by placing a limit or market order to buy the asset.

If you believe an asset is overvalued, you would take a short position by placing a limit or market order to sell the asset. This can be confusing for novice traders because you don't need to own the asset before "selling" it when trading digital asset perpetuals. Perpetual contracts allow you to effectively borrow the asset from the market at its current price, sell it, and then buy it back later at a lower price to profit from the difference.

For specific examples on how to place the various order types, check out more information here.