How Futures Work in Gate.io (Perpetual and delivery)

The next thing we will need to do is to deposit funds. I have a video on my channel and I will leave it in the description so you can see how to do it.

With the funds in our account, we are going to have to transfer them to the perpetual account to use them. Since you’re not going to be able to use the spot funds to trade futures. First though, let’s look at the two options you have.

Gate.io has both perpetual and futures delivery contracts. Although we will focus on perpetual let’s see what each one is in case you also want to use the other option.

Perpetual Contract

The perpetual contract is an innovative derivative. Unlike a traditional future, it has no expiration date. It uses a peer-to-peer fund exchange mechanism and a fair price-marking method so that its price is close to the price of the underlying benchmark.

Its maximum loss is the entire maintenance margin once its position is liquidated. The costs involved are the financing payment and entry and exit fees.

Unlike perpetual contracts, deliverable futures have expiration (or delivery) dates and settlement on the delivery date is the obligation of the seller and the buyer. This can be a problem if you do not calculate well or do not take into account the maturity date of the contract.

For this reason, we are going to see how futures with perpetual works, although you can also use delivery and the operation is almost identical.

The first thing we are going to do is to transfer our funds. To do this, we will go to spot and at the top you will see transfer. Click on it, and send our bitcoins or usdt to the perpetual futures wallet. In my case I will use USDT for this example.

Now we go to contract account to see our funds. If you want to use delivery, select delivery instead of perpetual when transferring the funds.

Now, with the funds in the contract wallet, go to trade, and perpetual. In my case, having transferred USDT, I will go to the USDT Settled option. Here, the first thing we are going to see is the bitcoin usdt pair in fuuros. If you want to trade another cryptocurrency, click on the arrow and look for the one you want. For this example I will take polkadot. We search for it and select it.

How to trade Futures

With the cryptocurrency we are interested in selected, we look at the right side of the screen. Here, we see the different options such as limit order, market order and stop order. If you want the order to be executed instantly at the market price, it is best to indicate market order. In limit order you can indicate a price, and if it reaches that price the order will be executed. Unlike market, it will not be executed immediately. For this example, I will select market. Next is the amount we want to buy of this cryptocurrency. Although before looking at it in more detail, at the top we find the calculator and the setup.

The calculator helps us to see the possible benefits we can get. This is very interesting if you have done an analysis and you think it will reach a certain price, to calculate the possible profit you can get. In setup you can change the position, but my recommendation is to leave it as it is.

Back to the quantity. Here, before selecting the quantity, below in cost you will see the price it will have or the cost we have to pay for this contract. This is closely linked to the leverage we want to use. For example, if we select 10 DOTs at a leverage of 20, the cost is around $12, but if on the other hand we lower the leverage to 10, the price is double, around $25.

So before indicating the amount and seeing the cost, my recommendation is to indicate the leverage first. In case of polkadot, the maximum leverage is 20, but in other cryptocurrencies you can use more leverage. Here it already depends on your risk/reward you want to use and your strategy to select the leverage you are comfortable with. Be aware of the possibility of being liquidated if you use too much leverage.

With the leverage selected, we can now select the amount and see the cost or price we will have to pay to be able to trade this contract. Below, we will see the real value of the contract, if we use the leverage x10, the value will be 10 times the cost. Further down, we will see the available amount we have in our USDT balance to trade.

Finally, we only need to indicate buy (long) or sell (short). Depending on where you think the market is going to go. In the futures you have the option to make money both when the price of the cryptocurrency rises and when it falls, if you have selected short.

Click on buy or sell and a tab will open with the contract information to see it before accepting. Click on buy or sell again and we will have the operation live. To see it, we go to the same cryptocurrency pair, and below we will see the contract in my positions. At any time, we can cancel the contract with the profit or loss with the reduce or close position button. Click on it and confirm. Here you will be able to cancel the whole contract or a % of it, if you want to cover the initial expenses or just reduce your risk.

Remember that delivery contracts have a very similar operation, so if you want to use them, you can also apply what we have been seeing.

I hope this post has helped you learn more about how to trade futures on gate.io with ease. If you don’t have an account with gate.io, below you can find a link to create one.