1. what is Bitcoin Futures
Bitcoin futures, also known as bitcoin contracts, are very different from currency transactions that must actually be held in digital currencies.

Bitcoin contracts enable you to predict the price movement of Bitcoin and hedge risk. This way of trading means that you are investing in price trends, not the asset itself.

In the spot market, traders can only profit from buying low and selling high, while in the futures (contract) market, they can profit from two-way market fluctuations by going long or short an underlying.

Do More: Buy the contract and expect the contract price to rise.

Short: Sell a contract with the expectation that the contract price will fall.

2. the type of bitcoin contract
There are currently two types of Bitcoin contracts, one is a delivery contract and the other is a perpetual contract, with the former agreeing on the delivery time of the contract and the latter not agreeing on the delivery time.

1. What is a delivery contract?
A delivery contract is when both parties to a futures contract agree to buy and sell the contract at the price of the futures at a specified time, that is, the delivery date. The contract price is all formed by the market mechanism, not using the index but using the latest transaction price to calculate the profit and loss.

-Type of delivery contract

Delivery contracts are generally divided into four types according to the delivery time, namely: current week, next week, current quarter, and next quarter.

A contract for the current week is a contract for delivery on the Friday nearest to the trading day;

A next-week contract is a contract for delivery on the second Friday closest to the trading day;

A contract for the current season is a contract with a delivery date of 3,6,9 and 12 on the last Friday of the month closest to the current month and does not coincide with the delivery date of the current week/week contract;

A contract for the second quarter is a contract whose delivery date is the last Friday of the second closest month to the current month in mid-March, June, September and December, and does not coincide with the delivery date of the current week/next week/current quarter contract.

Special circumstances: Under normal circumstances, a new next-week contract is generated after settlement and delivery every Friday. However, after the settlement on the penultimate Friday of the quarter month, the current quarter contract has only 2 weeks left, which actually becomes the next week contract. If a new next week contract is generated at this time, the two contracts will have the same expiration date. Therefore, after the settlement and delivery on the penultimate Friday of the 3rd, 6,9 and 12th of the quarter, the system will not generate the next-week contract, but a new second-season contract. At the same time, the original second-season contract will become the current-season contract, and the original current-season contract will become the next-week contract.

2. What is a perpetual contract?

Perpetual contracts are innovative financial derivatives that are developed on the basis of delivery contracts, but there are still many differences compared to the former. A perpetual contract is similar to a market for encumbered assets, with a price close to the price of the underlying reference index and no concept of an due delivery date. As long as the contract does not explode, you can hold it all the time.

-Knowledge points necessary for playing perpetual contracts

Knowledge Point 1-Capital Cost Mechanism

The capital cost mechanism is the most important feature of perpetual contracts, which allows perpetual contracts to always anchor the spot price. Perpetual contracts do not have due delivery dates, but capital charges are settled every eight hours.

If the rate of funds is positive, multiple parties will have to pay the cost of funds to the short party;

If the fund rate is negative, the short side will have to pay the cost of funds to many parties.

Calculation formula: cost of funds = net position value * rate of funds.

Knowledge Point 2-Forward Contract and Forward Contract

Forward contracts, generally denominated in USDT, use USDT as a encumbered asset to calculate profit and loss.

Reverse contracts, also known as currency-based contracts, are denominated in the case of BTC, using USDT, but using BTC to collect secured assets and calculate profit and loss.

Knowledge Point 3-Step strong leveling

Step strong leveling, that is, Partial Liquidation, when the user's position is triggered to be strong, the system will first judge the position corresponding to its net position, and its position in the way of reducing the position to the next level, if the first net position is calculated to be online, the guaranteed asset ratio is still less than or equal to 0, All the user's positions will be fully forced to close.