Introduction to Derivatives
Important: This product may not be available in your location or jurisdiction.
Derivatives are financial contracts that derive their value from an underlying asset. On the Bullish Exchange, we offer futures based on cryptocurrencies, allowing you to gain exposure to their price movements without holding the assets themselves.
We currently offer three main types of derivative products:
Perpetual Futures: These are contracts without an expiration date, designed to closely track the price of the underlying asset.
Dated Futures: These contracts have a specific expiration date in the future.
Options: These contracts give the holder the right, but not the obligation, to buy (a "call" option) or sell (a "put" option) an underlying asset at a predetermined price on a specific date.
Perpetual Futures, Dated Futures and Options share certain similarities and exhibit distinct as outlined below
Feature | Perpetual futures | Dated Futures | Options |
Expiration | No expiration date. | Have a specific expiration date | Have a specific expiration date and expires into the Dated Future |
Settlement | Priced and settled in USDC | Settled in USDC On the expiration date | Settled in USDC On the expiration date |
Funding | Hourly funding charges/rebates | No hourly funding | Futures Style Margining (FSM) approach where in the Options are subject to an hourly settlement process and no premium is charged upfront . |
Margining | Integrated with Bullish Portfolio Margining | Integrated with Bullish Portfolio Margining | Integrated with Bullish Portfolio Margining |
AMM Support | Yes | Yes | No |
Portfolio collateralization
Bullish’s best-in-class cross-collateralization system maximizes your capital efficiency within each trading account. You can use the same collateral to easily and intuitively trade any combination of spot, margin, perpetuals and dated futures. Every trading account is segregated so there is no sharing of collateral, or risk, between accounts. To learn more, view the Understanding collateral article.
Auto-borrowing and auto-settlement
Whenever your position owes an amount of a settlement asset, the exchange will first attempt to reduce your trading account’s available spot balance of that settlement asset. Then the exchange attempts to borrow any residual amount from available loan offers on a first-come, first-served basis using the Margin service. You will simply need enough collateral to borrow the settlement asset at the end of the settlement period. To trade futures, you also need to be eligible for margin trading and have it enabled on your trading account. Learn more about how settlement works.
Liquidity supported by AMM Instructions
Similar to Bullish Automated Market Making Instructions for spot markets, the Bullish Order Book for futures markets also provides liquidity via a combination of an Automated Market Maker (AMM) and a traditional limit order book. Futures' AMM Instructions require collateral margin instead of actual assets and involve specifying long or short positions, with the size of the other position automatically determined. This differs from spot AMM where specific amounts of assets are provided.