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Question 1- What is a key difference between traditional futures and perpetual futures? Select an option

A-Perpetual futures are not tradable

B-Perpetual futures do not have an expiry date

C-Perpetual futures are exclusively for commodities

The key difference between traditional futures and perpetual futures is:

B- Perpetual futures do not have an expiry date.

Traditional futures contracts have set expiry dates where the underlying asset is exchanged at a predetermined price. Perpetual futures, on the other hand, don't have a fixed expiration date, allowing traders to hold positions indefinitely as long as they meet margin requirements.

  

 

Question 2- Perpetual futures contracts involve which of the following types of payments between the long and short party? Select an option

A-Monthly payments

B-Annual payments

C-Payments that vary based on the funding rate

 

C - Payments that vary based on the funding rate.

Perpetual futures contracts involve payments between the long and short parties that fluctuate based on the funding rate. This rate adjusts periodically (usually every few hours) to ensure the contract price aligns with the underlying asset's market price. If the contract's price deviates from the underlying asset's price, payments occur between the long and short parties to maintain equilibrium, facilitated by the funding rate adjustments.

   

 

Question 3- Which statement best describes the leverage in perpetual futures? Select an option

A-Leverage allows traders to amplify their returns without risk

B-Leverage allows traders to access magnified profits and losses

C-Leverage guarantees a profit in perpetual futures trading

 

B - Leverage allows traders to access magnified profits and losses.

Leverage in perpetual futures (and in trading in general) enables traders to control a larger position size with a smaller amount of capital. While it can amplify potential profits, it also magnifies potential losses, significantly increasing the risk involved in trading. It doesn't guarantee profits; instead, it allows traders to take larger positions in the market using borrowed funds, potentially increasing both gains and losses.

 

Question 4- When trading leveraged perpetual futures: Select an option

A-You don't own the underlying crypto asset

B-You may stake the underlying crypto asset

C-You may use the underlying crypto asset to pay gas fees

A - You don't own the underlying crypto asset.

When trading leveraged perpetual futures, traders speculate on the price movements of the underlying asset without actually owning it. These contracts derive their value from the price of the asset but do not involve ownership or possession of the asset itself.

 

 

Question 5- When trading crypto linked perpetual futures, if the market moves against your position and you have insufficient collateral: Select an option

A-Your collateral is not affected and will be returned in full

B-You may be auto-liquidated and lose some or all of your collateral

C-You may cancel your trade

B - You may be auto-liquidated and lose some or all of your collateral.

In leveraged trading, especially in volatile markets like cryptocurrency, if the market moves unfavorably and your position faces losses that exceed the margin you've put up as collateral, the platform may liquidate your position automatically to cover those losses. This can result in the partial or complete loss of your collateral to cover the losses incurred in the trade.

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