Perpetual Swaps are an important tool for every trader. They give you exposure to assets you don't necessarily want to spot trade or hold, hedge your current spot positions and enter more risky trades (using leverage) according to your risk tolerance. 📚9🔚

⚠️ Of course, this also comes with a higher risk. If the price moves in the different direction you expected, you may run out of the capital to cover the loss - if this happens, you can get liquidated and lose your whole invested capital 📚8→

Moreover, perpetual swaps usually offer LEVERAGED trades With leverage, you can long/short with a larger capital than you actually have (x10, x20, x50) - offering potential gains a magnitude larger than the capital invested 📚7→

Using perpetual swaps you can make money no matter the market sentiment: 🟢 If you think the asset will be going up, you can LONG it 🔴 If you believe it's going to dump - you SHORT it 📚6→

This means that using perps you can enter a contract promising to BUY the asset at a later date (LONG) or SELL the asset (SHORT). Your profit comes from the difference between the price when you entered the contract and the market price when you close it 📚5→

In contrast, with PERPS: - You enter a contract (derivative) - You agree to buy (or sell) an asset later at the current market price - The contract doesn't have an expiration date - You can use leverage 🚀 - Your gain (or loss) comes from the difference in price 📚4→

When you SPOT trade: - You buy (or sell) actual cryptocurrencies on exchanges 💰 - You own the asset you bought ($BTC, $PEPE, etc.) - You can make money by selling assets for a higher price than you bought them 📚3→

Perps vs Spot In order to even start talking about perpetual swaps, we first have to discuss what are "normal" trades - spots. 📚2→