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Perps basics

What a perpetual future is, and how leverage, margin, isolated and cross margin, liquidation, mark price and funding work.

Module 1 of 28 lessons

Module 18 lessons 12345678
Module 18 lessons 12345678
  1. What a perpetual future isA perpetual future follows the price of a coin and never expires. You hold a contract, not the coin, and your profit or loss is in USDT.5 min
  2. Long and shortA long gains when the price rises and a short gains when it falls. You close a long by selling and a short by buying.5 min
  3. LeverageLeverage makes the same price move count more on your margin, for gains and for losses.5 min
  4. MarginMargin is the USDT that holds a position open. You lock the initial margin to open it, and the position must keep the maintenance margin or it is liquidated.6 min
  5. Isolated and cross marginIsolated margin gives each position its own margin. Cross margin backs all positions with one shared balance, which gives more room but puts everything at risk.6 min
  6. LiquidationLiquidation closes your position when your margin left falls to the maintenance margin, measured at the mark price.7 min
  7. Mark price and last priceThe last price is the last trade. The mark price follows the index and moves slowly, so the exchange uses it for liquidation, stops and funding.5 min
  8. FundingFunding is a payment between longs and shorts every 8 hours. It is worked out on the position size, and the rate follows the premium of the mark over the index.6 min