Perpetual futures are derivative contracts with no fixed expiry date. They let you take a long or short position on an asset's price without purchasing that asset. The contract remains subject to margin requirements, funding, and the venue's settlement rules.
Use the live tools
A perpetual position is a claim under a trading contract. It does not give you Bitcoin to withdraw or Ether to use on Ethereum. This guide explains the position, its cash flows, and the information a beginner needs before comparing venues.
Key takeaways
- A long position gains from a higher contract price; a short gains from a lower price, before costs.
- Margin supports the full position value, which can be much larger than the deposit.
- Funding changes the cost of keeping a position open.
- Liquidation can close a position before all its margin disappears.
What you hold when you trade a perpetual
A derivative takes its value from a reference asset or measure. For a Bitcoin perpetual, the reference asset is Bitcoin. The contract specifies how quantity, prices, collateral, and settlement determine the account balance.
Expiry changes how exposure continues
Dated futures
Settle the contract, or close and open a later contract to continue exposure.
Perpetual futures
Funding can apply while the position stays open. No regular contract roll.
A long and a short have opposite exposure. If the price rises, the long gains and the short loses before costs. If it falls, the short gains and the long loses. The venue enforces the financial obligations through its margin and liquidation rules.
The dYdX funding documentation describes perpetual contracts without an expiry or final delivery. It explains why the protocol uses funding incentives to keep contract prices near its reference price.
You can compare the available markets for an asset on the Bitcoin page or Ethereum page. Those pages show market context, while the contract documentation defines what you actually trade.
Compare perpetual futures, dated futures, and spot
A spot purchase transfers an asset, subject to the platform's custody and withdrawal rules. A futures position creates contractual price exposure. Dated futures also specify an expiry and settlement process.
The CFTC futures overview distinguishes delivery and cash settlement. A trader can often close a dated contract before its expiry. Holding exposure beyond expiry requires a separate contract or another position.
| Feature | Unborrowed spot purchase | Perpetual futures | Dated futures |
|---|---|---|---|
| What you hold | The purchased asset or a custody claim | A derivative position | A derivative position |
| Fixed expiry | No | No regular expiry | Yes |
| Periodic funding | No contract funding payment | Depends on contract rules | Generally embedded in pricing rather than perp-style funding |
| Margin liquidation | Not from leverage if no borrowing | Can apply | Can apply |
| Asset delivery | Withdrawal depends on custody rules | Usually no asset delivery | Contract-specific |
An exchange can delist a perpetual market even though it has no scheduled expiry. Hyperliquid's delisting rules provide an example: positions settle and open orders are canceled.
Follow a hypothetical long trade
Assume a simple contract with profit and loss measured in dollars. A trader buys exposure to 0.1 BTC at a contract price of $100,000 per BTC. The initial position value is $10,000.
See how price changes the position’s result
Leverage changes the margin required for this position. It does not change its dollar price result.
If the trader closes at $103,000, the price gain is 0.1 × $3,000 = $300. If the trader closes at $97,000, the price loss is $300. Fees, funding, and execution differences change the final result.
| Hypothetical closing price | Long price result | Short price result |
|---|---|---|
| $103,000 | +$300 | -$300 |
| $100,000 | $0 | $0 |
| $97,000 | -$300 | +$300 |
The table assumes the positions remain open until the stated close. A real position can liquidate before reaching an intended exit. It also assumes matched quantities and a contract with linear dollar profit and loss.
Contracts that settle in the underlying coin can use different formulas. Read the contract specification instead of applying the dollar example to every market.
Separate position value from margin
Notional value is the full reference value of a position. Margin is the collateral that supports it. Leverage equals notional value divided by margin.
A $10,000 position with $2,000 of margin uses 5x leverage. The same position with $1,000 of margin uses 10x. Both positions gain $300 from the favorable price move in the hypothetical example. Their gains relative to margin are 15% and 30%, respectively.
The smaller margin also provides less room for losses. Leverage does not create extra dollar profit when position quantity stays unchanged. It changes the amount of collateral supporting that quantity.
A perpetual position also does not necessarily involve a cash loan for the difference between margin and notional. Its leverage comes from the derivative obligation. A separate borrowing charge can still apply to some products.
Understand funding as a separate payment
Funding is a periodic payment linked to an open perpetual position. A positive rate means longs pay shorts under the usual signed-rate convention. A negative rate reverses that payment.
The sign tells you who pays
The latest price gap alone does not determine the final funding rate.
Hypothetical example: a $10,000 long faces +0.01% funding for one settlement. It pays $1. If it faces -0.01%, it receives $1. The payment uses the contract's position valuation rules at settlement.
A favorable funding payment does not offset every possible price loss. A $1 receipt has little effect on a $300 price loss. Holding costs also change when rates or position values change.
Bybit's funding guide describes estimated rates that change before settlement. The funding explainer shows interval conversion and the limits of annualized rates.
Why liquidation can occur before margin reaches zero
Initial margin is the amount required to open a position. Maintenance margin is the minimum required to keep it open. A venue can liquidate a position when the supporting balance falls below that maintenance requirement.
The trigger can use a mark price instead of the last traded price. Mark price is a venue reference used to value positions. It can differ from the visible price of the most recent fill.
Hyperliquid's liquidation documentation states that liquidations use mark price. It also explains that funding and other positions can change a displayed liquidation estimate.
A stop-loss order requests an exit after a trigger condition. It does not guarantee the execution price or successful execution during a disruption. Use the leverage guide to work through position size, costs, and a planned stop.
Compare custody and execution separately
A centralized exchange generally manages the trading account and holds deposited customer funds. A decentralized exchange uses blockchain-based processes for some or all of the trade. The label alone does not explain every control over funds.
A crypto wallet controls keys. Depositing margin can still place assets under contract, validator, bridge, or account rules. Withdrawal access depends on those systems and the route used. A public ledger can help inspection without ensuring that funds are always recoverable.
Execution design is another choice. An order book matches buy and sell orders. A pool-based protocol uses a pool and its pricing rules. Both designs require a review of prices, fees, margin, and available capacity.
The DeFi derivatives guide compares those operating models. The Hyperliquid safety review shows why a venue-specific risk review needs more than a custody label.
Estimate the complete trade cost
Entry and exit fees apply to executed position value. Funding applies under the holding rules. Slippage and the bid-ask spread can affect the execution price. Borrowing and transfer charges depend on the product and funding route.
A small fee is only part of the cost
Half-spread + book impact = price cost from the midpoint. Adding the full spread again would count part of the cost twice.
Assume the example long earns $300 from price changes. If trading fees total $8 and funding costs $6, the result is $286 before other costs. This constructed example shows why the price result differs from account profit.
Use the cost comparison tool for its covered venue inputs. A missing cost field means the estimate has incomplete coverage. It does not justify adding zero for that charge.
What to check before a first position
- Read the exact contract name, asset quantity, and settlement currency.
- Check whether the account and product are available in your location.
- Find the initial and maintenance margin rules.
- Record the funding interval and current estimated rate.
- Calculate the dollar loss at a planned exit.
- Add entry, exit, and holding costs.
- Review the withdrawal process and limits.
A testnet is a separate environment that uses tokens with no intended real monetary value. It can help you learn order controls. It cannot prove how real liquidity or stressed withdrawals will behave.
Sources and limits
The linked primary documentation was reviewed on September 13, 2026. All trade examples are hypothetical. This introduction covers contract mechanics, not a claim that perpetual trading suits every reader.
The CFTC risk advisory explains how leverage amplifies gains and losses. It also warns that some futures arrangements can create losses beyond the initial investment. The applicable contract and account rules determine your obligations.
Do I own Bitcoin when I buy a Bitcoin perpetual?
You hold a derivative position.
It does not provide Bitcoin for withdrawal unless the specific contract explicitly provides asset delivery.
Can I keep a perpetual open forever?
There is no fixed expiry, but margin, delisting, settlement, and operating rules can end the position.
Can a perpetual lose money at 1x leverage?
Yes.
Price changes, funding, execution costs, and platform failures can cause losses. The leverage setting does not remove those risks.
Can I use a funding payment as income?
You can receive a payment when your side qualifies.
The next rate and the total trade result remain uncertain.
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