What are perpetual futures (in one minute)?
Perpetual futures (“perps”) are crypto futures contracts with no expiry. You can hold a position as long as you want, and the contract price stays close to spot via a funding payment between longs and shorts.
- Perps track spot via periodic funding (often every 8h).
- You trade with leverage using margin.
- Liquidation is possible if your margin gets too low.
Why people trade perps
- Access leverage without borrowing spot.
- Go long or short with the same instrument.
- High liquidity on majors like BTC and ETH.
Not investment advice. Start small.
Spot vs perps vs traditional futures
- Spot: buy/sell the asset directly, no leverage by default.
- Perps: no expiry, funding keeps price anchored.
- Traditional futures: fixed expiry, no funding but rollover/settlement.
If you’re brand new, start with small size and low leverage. Most beginner losses come from over-leverage, not bad entries.
The 3 core mechanics to understand
- Funding: periodic payment between longs and shorts (keeps price anchored).
- Leverage & margin: magnifies PnL and risk; maintenance margin controls liquidation.
- Mark price: liquidation uses mark price, not last trade.
Beginner checklist (before your first trade)
- Use isolated margin and 2x–5x leverage.
- Know your liquidation price before entering.
- Set a stop loss immediately after entry.
- Avoid illiquid pairs and major news events.
Where to start on PerpHQ
- Live funding snapshots: /funding
- Funding explained: Perpetual Funding Rate Explained
- Perp vs futures: Perpetual vs Traditional Futures