Explanation of Perpetual Swaps: Open Interest, Premiums/Discounts, Funding rates, Liquidations
[THREAD 1/15]
[THREAD 1/15]
First things first:
Some basics on open interest:
Visual of perpetual swap open interest YTD in USD terms:
This is perpetual swap open interest relative to Bitcoin's market cap. My personally preferred view because it's important to gauge how many contracts are built up relative to the size of the market.
Premiums and Funding rates:
More thoughts on funding:
Applying funding rates:
Regimes of funding:
Example of strong dislocation between funding and price action from summer 2021
More examples of applying dislocations between price action and funding rates
What in the world are liquidations?
Liquidations continued:
Liquidations in gold. Notice spikes in confluence with open interest wipeouts.
Really hope you enjoyed my ramblings and got some value out of this. Would appreciate a reshare but no sweat if not. Also thanks to Cred for peer-reviewing.
Video version will be out later today. More of these threads to come! Take care <3
Video version will be out later today. More of these threads to come! Take care <3
Tagging this on in case anyone may have missed it. More videos coming shortly.
Loading suggestions...