Kraken has announced plans to launch the first CFTC-regulated perpetual futures for US traders on Kraken Pro within the next 30 days, bringing important crypto derivatives to the domestic market.
Frequently Asked Questions
Here is a list of FAQs about Kraken Pro launching the first CFTCregulated perpetual futures in the US
Beginner Questions
1 What is a perpetual future in simple terms
Its a contract that lets you bet on the price of a cryptocurrency going up or down without ever having to buy or sell the actual coin Unlike regular futures it never expires so you can hold it as long as you want
2 Why is this a big deal for US customers
Previously most perpetual futures trading was only available on offshore unregulated exchanges This is the first time a US exchange has gotten approval from the Commodity Futures Trading Commission to offer them meaning its safer and follows US laws
3 Do I need to buy the actual crypto to trade these
No You trade using a contract based on the price of the asset You only need to put up a small amount of money as margin to open a position
4 What is leverage and should I use it
Leverage lets you control a larger position with a smaller amount of money It can increase your profits but it also increases your risk of losing your money very quickly Beginners should start with low or no leverage
5 How is this different from buying Bitcoin on the spot market
When you buy Bitcoin on the spot market you own the actual Bitcoin With perpetual futures you only own a contract that tracks the price You cannot withdraw the actual Bitcoin from a futures position
Advanced Questions
6 How does the funding rate work in a regulated environment
The funding rate is a periodic payment between traders who are long and those who are short It keeps the contract price close to the actual spot price On Kraken Pro the rate and mechanics are fully transparent and reported to the CFTC
7 Will this product use an inverse or linear contract structure
Most USregulated perpetuals are