Perpetual Futures Guide
What are perpetual futures?
Perpetual futures ('perps') are the most heavily traded derivatives in the crypto market. Unlike traditional futures they have no expiration date, so you can keep a position open as long as your margin holds up.
Without holding the actual asset, you can use leverage to go long (betting on price up) or short (betting on price down). If you think the price will rise, go long; if you think it will fall, go short.
How they differ from spot trading
| Spot trading | Perpetual futures | |
|---|---|---|
| Asset ownership | you own it | you don't |
| Shorting | not possible | possible |
| Leverage | not possible | possible |
| Expiry | none | none |
| Liquidation risk | none | yes |
💡 If you're a long-term holder who just wants price exposure, spot is better. For short-term directional bets or hedging, perpetual futures are more flexible.
Concepts you must know
Leverage
The ability to trade a larger size than your own funds. With 10x leverage you can open a $1,000 position with $100.
⚠️ The higher the leverage, the higher the liquidation risk. Start at 3x or lower.
Funding rate
The mechanism that keeps perpetual futures anchored to the spot price. Every hour, a fee is settled between long and short holders. It accumulates the longer you hold a position, so always check it.
- Funding is positive (+) → longs pay shorts
- Funding is negative (−) → shorts pay longs
Liquidation
If position losses exceed your collateral, the system closes the position automatically. In isolated mode, you cannot lose more than the amount you put in.
FAQ
Do perpetual futures have an expiration date?
No. As long as you meet the maintenance margin, you can hold indefinitely. Instead of expiry, the funding rate mechanism keeps the contract anchored to the spot price.
Do I own the actual asset when trading perpetuals?
No. Perps are synthetic contracts settled in USDC. If you want actual ownership of the asset, buy spot.
What's the maximum leverage available?
Depends on the asset. Majors like BTC and ETH support up to 40x, while smaller assets are capped at 5–10x to reflect higher volatility.
Are perpetual futures traded 24/7?
Yes. They trade year-round including weekends and holidays. The Hyperliquid order book is always open.
How is PnL calculated?
Unrealized PnL = (current mark price − entry price) × position size, with the sign reversed for shorts. Realized PnL includes funding payments accrued up to close and trading fees.