What is rolling over? A must-read for contract traders! Even beginners can understand it in seconds~
💰 Must-read in the crypto world | What the heck is 'rolling over'? A self-rescue guide for contract traders!
🔍 What is rolling over in the crypto world?
In one sentence: Close position → Change position → Extend life!
In the crypto world, rolling over is common among *leveraged contract traders*, especially those who play with futures/perpetual contracts.
💥 Three main scenarios of rolling over in the crypto world
1️⃣ Don't want to deliver when a contract expires
👉 Crypto futures are divided into two types: *perpetual contracts* (no expiration date) and *quarterly contracts* (3-month expiration).
If you hold a quarterly contract (e.g., June BTC contract), close the position as it approaches expiration, and switch to the September contract to continue 'holding the order'!
❗️ Note: While perpetual contracts do not require rolling over, you have to pay 'funding rates' (long and short positions offsetting)!
2️⃣ **Leverage is about to explode, desperately extending life
👉 Using 10x leverage to go long on BTC, and the price plummets to the liquidation line?
🔥 Emergency operation: Close half of the position → Use the remaining margin to reopen a position → Reduce leverage to survive!
3️⃣ Daily operations of arbitrage traders
👉 For example, simultaneously shorting a BTC quarterly contract from one exchange (high price) while going long on another's perpetual contract (low price), rolling over at expiration to lock in the price difference profit～
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⚠️ Hidden risks of rolling over in the crypto world**
❌ Funding rate backlash: Rolling over a perpetual contract to a new platform may result in being harvested by high funding rates!
❌ Spike assassin: Encountering extreme market conditions during the rollover, both old and new positions could get liquidated!
❌ Gas wars: On-chain contract rolling over (like ETH options) may deplete your wallet due to miner fees!
🔥 Rolling over operations:
1️⃣ Close 90% of the position (leave 100U)
2️⃣ Use 100U to reopen a 10x leveraged long position
▫️ Result: Position shrinks but leverage decreases, able to withstand volatility → Wait for a rebound!
🚨 Guide to avoiding pitfalls in crypto rolling over
✅ Calculate price differences in advance: When changing quarterly contracts, compare the prices of the new and old contracts!
(Under contango structure, long-dated contracts are more expensive → rolling over = losing money)
✅ Avoid high-rate periods: Roll over perpetual contracts before the funding rate updates (usually every 8 hours)
✅ Reserve enough gas fees: On-chain operations should reserve at least $50 to cope with congestion!
💬 Summary
Rolling over in the crypto world = dancing on the edge of a knife, the core message is:
"Either extend life and turn things around, or accelerate death"
Suggestion: Beginners should stay away from high leverage, and experienced traders should roll over with stop-losses! #BTC重返12万
