What is rolling positions? A must-read for contract traders! Even beginners can understand it in seconds! 💰
🔍 What is rolling positions in the crypto world?
In summary: Close position → Switch position → Extend life!
In the crypto world, rolling positions are commonly seen among *leverage contract traders*, especially those involved in futures/perpetual contracts.
💥 3 Major Scenarios of Rolling Positions in Crypto
1️⃣ Do not want to deliver upon contract expiration
👉 There are two types of crypto futures: *perpetual contracts* (no expiration date) and *quarterly contracts* (expire in 3 months).
If you hold a quarterly contract (like the June BTC contract), close your position as it approaches expiration, and switch to the September contract to continue “holding the position”!
❗️ Note: Although perpetual contracts do not require rolling positions, you have to pay a “funding fee” (long and short positions offset each other)!
2️⃣ **Leverage is about to be liquidated, forcibly extending life
👉 Using 10x leverage to go long on BTC, price plummets to the liquidation line?
🔥 Emergency action: Close half of the position → Use remaining margin to open a new position → Reduce leverage, hang in there!
(Commonly known as the “death sentence tactic”, but it may lead to increasing losses…)
3️⃣ Daily operations for arbitrage traders
👉 For example, simultaneously shorting a BTC quarterly contract (high price) at one exchange and going long on a perpetual contract (low price) at another, rolling positions at expiration to lock in price difference profits～
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⚠️ Hidden Risks of Rolling Positions in Crypto**
❌ Funding fee betrayal: Rolling perpetual contracts to a new platform may result in being harvested by high funding fees!
(Example: Certain platform's funding fee is 0.1%, rolling once = free transaction fee)
❌ Spike assassin: Encountering extreme market conditions during rolling positions can lead to liquidations on both old and new positions!
❌ Gas wars: Rolling on-chain contracts (like ETH options) may drain your wallet due to miner fees!
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🌰 A Real Case in the Crypto World
Scenario: You use 100x leverage to go long on ETH, with a capital of 10,000 USDT
▫️ ETH price drops 10%, margin left is only 1,000 USDT, just 1% away from liquidation!
🔥 Rolling position action:
1️⃣ Close 90% of the position (leave 100 USDT)
2️⃣ Use 100 USDT to open a new long position with 10x leverage
▫️ Result: Position size reduced but leverage lowered, able to withstand volatility → Wait for a rebound!
(But if it continues to drop, 100 USDT will still go to zero…)
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💬 Summary
Rolling positions in crypto = Dancing on the edge of a knife, the core message is:
“Either extend life to turn the situation around, or accelerate death”
Advice: Beginners stay away from high leverage, experienced traders roll positions with stop-losses!
