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Perpetual contracts

Binance

Cryptocoins Exchanges / Binance 478 Views

Hello guys i have a question about perpetual contracts...

I don't really know how perpetual contracts work and i thought that you could help me a little bit. First of all i want to give you an example... Let's say Trader A places a long position with 10.000 contracts, then he would trade against someone who is shorting that asset with 10.000 contracts that would be Trader B right? So in the futures market, the asset has an expiry date where the positions would be closed automatically. Let's say that on the expiry date, Trader A closed the position with a profit of 100 dollars and Trader B closed the position with a loss of 100 dollars. That means that Trader B's loss would go to Trader A as a profit, that way the exchange doesn't have to "pay" the winners money. But how is it working in perpetual contracts if the traders can open and close the positions at any time. Let's say that Trader A is 100 dollars in profit and trader B is 100 dollars in loss. Trader B decides to close the position with a loss of 100 dollars but trader a holds his position and let's say that he's closing his position with a profit of 500 dollars. Now Trader B lost 100 dollars but Trader A won 500 dollars. How is trader a getting his money. Because i don't think that the exchange wants to give every profitable trader their money... like you know what i mean. I would be glad if someone could explain it to me. Please tell me also if i said anything wrong. Thanks!

submitted by /u/x-xfp
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