What does U-based perpetual contract mean? Understanding U-based perpetual contracts in one article

The U-based perpetual contract is an agreement to sell or purchase assets at a fixed price in which the currency used as collateral assets and calculation of profit and loss is the stable currency USDT. Perpetual contracts work in much the same way as futures contracts, with one significant difference, which is that a perpetual contract is a contract that has no expiry date.

#What does U-based perpetual contract mean?

There are similarities in how perpetual contracts and futures contracts work, but there are also significant differences. Perpetual contracts are contracts with no expiration date, and the pricing unit of U-standard contracts is the stable currency USDT. At the same time, the stable currency USDT is also used as a currency for collateral assets and profit and loss calculations. This design makes U-based contracts more stable when the market fluctuates, because unlike traditional contracts, they have no expiration date restrictions and investors can choose the holding time according to their needs. In addition, since the pricing unit is the stable currency USDT, investors can more easily conduct position management and risk control. Overall, the characteristics of U-based contracts provide investors with more flexibility and

One of the big advantages of perpetual contracts is that you can hold them indefinitely. There is no expiration or exercise date, which means that even if the price goes against your position, you won't be immediately put into a loss. You just need to make sure you have enough funds to back your position, then hold on and wait for the price to move in your favor again. This flexibility allows you to better manage risk because you are not limited by time. Additionally, because perpetual contracts are leveraged, you can take out larger positions with less capital, thus increasing your return on investment. However, it should be noted that high leverage also means higher risks, so you need to be cautious and sure when trading perpetual contracts. Take this case as an example. Let’s say you are absolutely certain that the price of Bitcoin will rise. But unfortunately, you can't know exactly how long this rise will take. If the price doesn't rise when the futures contract expires, you're in for a bad trade. However, with perpetual contracts, you can maintain your position continuously without being restricted by expiration time. This way, you maximize your chances of a successful trade.

Summary of features of U-based perpetual contracts

The perpetual futures contract is a unique advanced futures contract that differs from traditional futures contracts in that it No expiry date restrictions. This means traders can hold positions as long as they wish, eliminating time pressure. Buyers and sellers can manage their positions more flexibly in this kind of contract and are not restricted by expiration dates. This indefinite feature makes perpetual futures contracts a unique financial instrument and increases traders’ operating space in the market. Since there is no expiration, unlike futures contracts, perpetual contract transactions are not restricted by the commitment date. In the absence of specific regulations, buyers and sellers can execute transactions at any time according to their own wishes. This flexibility makes the perpetual contract more adaptable to market changes and can be traded at any time according to actual conditions, thereby better adapting to the needs of participants and market fluctuations.

Therefore, perpetual contracts provide sellers with the convenience of selling assets when their prices fall, while also enabling buyers to buy when they expect asset prices to rise.

4) Perpetual contract trading is an index price calculated based on the average asset price and its corresponding trading volume.

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