Expiry Futures, Perpetual Swaps, and Margin Liquidation

Summary

The document explains crypto expiry futures as derivative contracts with a fixed settlement date and contrasts them with perpetual swaps, which have no expiry and can incur periodic funding fees. It describes expiry futures as potentially useful for longer-term views and hedging, with weekly, biweekly, and quarterly maturities noted. The comparison also gives leverage limits of up to 20× for expiry futures and up to 50× for perpetual swaps, though these are presented as product details rather than general market rules.

It outlines initial margin, maintenance margin, and the relationship between leverage and the room a position has to move against a trader. On OKX, the article says liquidation is triggered when the maintenance margin ratio reaches 100% or below; it may close some or all of a position at the prevailing market price, without a grace period. Suggested precautions include monitoring margin, setting alerts and stop losses, and using lower leverage. These details are platform-specific, and leveraged derivatives can still lead to loss of all collateral.

Key ideas

• Expiry futures settle on a fixed date, while perpetual swaps have no scheduled expiry.
• Perpetual swaps may incur funding fees, whereas the described expiry futures do not.
• Higher leverage lowers the initial margin requirement but reduces the buffer against adverse price moves.
• The document states that OKX liquidation is triggered when the maintenance margin ratio reaches 100% or below.
• Margin monitoring, alerts, stop losses, and smaller positions are presented as ways to manage liquidation risk.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.