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What Does Perpetual Contract Liquidation Mean (Specific Operations of Perpetual Contracts)

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What does perpetual contract liquidation mean? In trading, investors generally

What Does Perpetual Contract Liquidation Mean (Specific Operations of Perpetual Contracts)

What does perpetual contract liquidation mean? In trading, investors generally engage in the liquidation of perpetual contracts. Since perpetual contracts have a fixed price, it can be understood as settlement in BTC/USDT. When there is a loss, it will be immediately closed or the margin will be withdrawn to bear the loss, and the funds in the perpetual contract will be returned to the user’s hands when it falls. However, if delivery cannot be completed and executed in a non-delivery situation, this problem cannot be completely resolved. So why does this situation occur? It is because it lacks determinism and has significant volatility.

Therefore, regardless of the conditions that cause market changes, a result will eventually be produced – what does perpetual contract liquidation mean.

Specific Operations of Perpetual Contracts

According to official news, contract trading is mainly divided into two types: spot and perpetual contracts. The first type includes long position, short position, or choosing spot hedging; the second type includes long position (buying) and short position (selling). The specific operations are as follows:

1. When opening a position, pay attention to whether the price is higher than the current quoted price. 2. If the market rises, it is necessary to reduce the position in a timely manner to avoid losses. 3. If the market falls, you can wait for the bottom price given by the market. 4. When the market is rising, pay attention to whether the price can surpass the current price.

5. If the market is declining, you can wait for the price to reach the target point before closing the position again.

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