Huobi DM, the leading digital asset derivatives trading platform of Huobi Group, announced the launch of perpetual swaps, a new derivative product that enables users to better hedge risk and create leveraged arbitrage opportunities in volatile market conditions.
Similar to traditional futures contracts, perpetual swaps allow users to buy or sell assets at a specific price to hedge against market fluctuations. But compared to the feature that traditional futures contracts have predetermined expiry dates, perpetual contracts let users hold positions as long as they’d like—as long as they maintain their required margins.
“As we’ve recently experienced, sudden market swings can have a significant yet temporary impact on the broader financial ecosystem, but volatility itself is a very normal part of market cycle,” said Ciara Sun, VP of Global Business of Huobi Group. “Perpetual swaps provide traders another tool in their arsenal to capitalize on market movements to create arbitrage.”
At launch, Huobi DM supports inverse perpetual swaps, also known as coin-margined perpetual swaps, which are quoted in USD but margined and settled in a contract’s underlying digital asset. The trading platform currently enables BTC swaps and will add other major cryptocurrencies like ETH, EOS, and LTC in the near future.