Perpetual futures let you trade crypto price movements without a fixed expiry date, but they involve leverage and liquidation risks. Learn how long and short positions work, explore trading strategies and understand the risks involved.
Perpetual futures, also called perpetual swaps or perps, are derivative contracts that track the price of an underlying asset without an expiration date. Instead of owning the asset directly, you take price exposure through a contract.
Traditional futures expire on a set date. If you want to keep exposure after expiration, you usually have to roll the position into a later contract. Perpetual futures remove that step, so there are no rollover costs tied to moving from one contract cycle to the next.
With perps, you can keep a position open as long as you meet the margin requirements. That structure fits crypto markets, which trade around the clock, because you’re not working around a fixed contract end date.
Perps also support two-way positioning:
Either direction can move against you quickly, especially when leverage is involved.
Leverage lets you open a larger position than the amount of collateral posted. That can make your capital work across more exposure, but it also increases the speed at which losses can build.
With Crypto.com Perpetuals, you can access eligible crypto perpetual contracts from one trading environment, subject to product availability and jurisdictional requirements.
Availability depends on where you live and which Crypto.com product you use. The Crypto.com Exchange and Crypto.com | Derivatives North America are separate product paths, so US traders need to check the eligible US derivatives experience rather than assuming the global Exchange setup applies.
Perpetual futures don’t expire, so they use funding rates to help keep contract prices close to the underlying spot market. Funding is a periodic payment exchanged between long and short positions. The exchange usually doesn’t pay this fee itself. One side of the market pays the other.
When funding is positive, long positions usually pay short positions. This often happens when the perpetual contract trades above the spot reference price, which can happen during stronger demand for long exposure.
When funding is negative, short positions usually pay long positions. This can happen when the perpetual contract trades below the spot reference price, often during heavier demand for short exposure.
If you open and close a position before the next funding event, funding may have little or no effect on that trade. If you hold a position across several funding periods, those payments can add to or reduce the total cost of keeping it open.
The mark price is the price used to calculate unrealized profit and loss, or the open gain or loss on a position, as well as liquidation risk. It can differ from the last traded price, which is simply the most recent price where a trade took place.
Crypto platforms use mark price to reduce the effect of sudden price wicks, thin order books or unusual one-off trades. Instead of relying only on the last trade, the mark price usually draws from broader market pricing, such as index prices or fair value calculations.
That can help reduce the chance of a position being liquidated because of a brief pricing spike rather than a broader market move. Both prices are worth watching during fast markets, because the mark price affects account health.
Leverage lets you open a larger position than the collateral you post. For example, with 5x leverage, $200 in margin can control a $1,000 position before fees and other adjustments. The position then reacts like $1,000 of market exposure.
That can increase potential capital gains, but it also increases risk exposure. A smaller price move can have a larger effect on your margin, which means liquidation can happen faster than it would without leverage.
Initial margin is the collateral required to open the position. Maintenance margin is the minimum margin required to keep it open. If your margin falls below that threshold, the platform may liquidate the position.
For newer traders, lower leverage is one of the more straightforward risk controls. It gives the position more room before liquidation and makes each price move less aggressive against the account balance.
To open or short on perpetual futures, you first choose a contract and decide whether you expect the underlying asset’s price to rise or fall. You can open a long position if you expect the price to rise or a short position if you expect it to fall.
Both directions carry risk. A long position can lose value if the market falls, while a short position can lose value if the market rises. Before you enter either side, it helps to settle on the contract, margin mode, leverage level and exit levels.
Here’s a basic workflow for how to long perpetual futures or how to short perpetual futures:
A market order seeks immediate execution at the best available market price. The final execution price can differ from the price shown before confirmation, especially during fast price moves.
A limit order lets you set the price where you’re willing to trade. It gives you more control over entry, but the order may not fill if the market never reaches that price.
BTC is often the first market people look at when learning how to trade bitcoin perpetual futures. It usually has deeper liquidity and tighter spreads than smaller crypto assets, which can make entries and exits easier to compare.
If you expect BTC to rise, you can open a long BTC perpetual position. If you expect BTC to fall, you can open a short BTC perpetual position. Either way, it helps to define your margin mode, leverage level, stop-loss and take-profit plan before you enter.
Once the order fills, the position is worth monitoring. Funding payments, mark price movement and margin health can all change while the trade remains open.
Searches for the most profitable perpetual futures strategies often make perps sound more predictable than they are. No strategy works in every market and leverage can magnify losses as quickly as potential gains.
One way to compare perpetual futures strategies is to look at what each one is trying to do. Some focus on price direction. Others try to reduce exposure or use funding rates as part of the setup.
Directional momentum trading looks for long or short entries in an existing price move. You might use trendlines, volume, moving averages, breakouts or other technical indicators to decide whether momentum still supports the trade.
For example, you may open a long position after price breaks above a resistance area with strong volume. You may open a short position if price falls below support and selling pressure continues.
This approach is easy to understand, but not easy to manage. False breakouts happen, and a fast reversal can move against a leveraged position quickly.
Before entering, you can define the trade with Isolated Margin, smaller position sizing and a pre-entry Stop-Loss. That helps keep one failed setup from affecting more of your account than planned.
Delta-neutral hedging aims to reduce directional exposure. If you hold spot BTC, for example, you may open a short BTC perpetual position to offset some downside price movement.
If BTC falls, the spot position may lose value while the short perp gains value. If BTC rises, the spot position may gain value while the short perp loses value. The goal is to reduce sensitivity to price direction, not to predict every move.
This approach can fit traders who want to keep an underlying position but reduce short-term exposure. It can also be used around events, announcements or periods when price moves become harder to read.
The trade-off is cost and complexity. Funding rates, fees, spread costs and imperfect sizing can all affect the result. If the hedge is too large or too small, the account may still carry more directional risk than expected.
Funding rate arbitrage focuses on periodic funding payments rather than price direction. A common structure pairs spot exposure with an equivalent short perpetual position when funding is elevated and long positions are paying shorts.
In that setup, the spot position and short perp can offset much of the price movement. If the funding rate stays favorable, you may receive funding payments from the short side of the trade.
The setup still carries risk. Funding rates can change, spreads can widen, execution can slip and the hedge may not stay balanced. A sharp market move can also put pressure on margin before the setup has time to play out.
If you’re exploring crypto arbitrage strategies, funding rates are worth understanding because they’re visible before entry. They aren’t fixed, though. Funding can shift quickly when positioning changes across the market.
Strategy | Typical use case | Complexity | Capital efficiency | Main risk |
Directional momentum | Trading an existing uptrend or downtrend. | Low to medium. | High with leverage. | False breakout or fast reversal. |
Delta-neutral hedging | Reducing exposure on an existing spot position. | Medium. | Medium. | Imperfect hedge, funding fees or wrong sizing. |
Funding rate arbitrage | Pairing spot and perp positions during elevated funding. | High. | Medium to high. | Funding changes, execution costs and liquidation risk. |
Margin mode controls how your collateral supports a perpetual futures position. The two main choices are isolated margin and cross margin, and the difference affects how much of your account can be exposed if a trade moves against you.
Initial margin is the collateral you need to open a position. Maintenance margin is the minimum collateral level you need to keep that position open. If your margin falls below the maintenance threshold, liquidation can occur.
Isolated margin assigns a set amount of collateral to one position. If that position reaches liquidation, the loss is limited to the margin assigned to that trade, subject to platform rules and fees. Your remaining available balance isn’t automatically pulled into the position.
That makes isolated margin a useful built-in safeguard when you want a clearer risk boundary. It can help keep one losing trade from drawing on the rest of your available account balance.
Cross margin works differently. It can use available account equity to support open positions, which may give a trade more room before liquidation. But that extra room comes with a wider risk boundary because a losing position can draw on more of your total balance.
It helps to choose the margin mode before entry rather than after the trade starts moving. If you want to contain risk to one setup, isolated margin gives you more separation. If you’re managing several connected positions, cross margin may offer more flexibility.
A stop-loss order adds another layer of risk control. It can close a position before the maintenance margin threshold is reached, although execution still depends on market conditions, order type and available liquidity.
Feature | Isolated Margin | Cross Margin |
Collateral use | Margin is assigned to one position. | Available account equity may support multiple positions. |
Risk boundary | Loss is limited to the allocated margin, subject to rules and fees. | A losing position may draw on more of the account balance. |
Flexibility | Gives clearer control per trade. | Gives more flexibility across several positions. |
Common use | Short-term trades, new setups and tighter risk limits. | Portfolio-level positioning, hedging and multi-position management. |
Liquidation effect | Liquidation applies to the isolated position. | Shared equity can support the position before liquidation. |
How to trade perpetual futures in the US depends on eligibility, product availability and which Crypto.com experience you use. Crypto.com Exchange derivatives are restricted in the United States, while eligible US users may access CFTC-regulated derivatives through Crypto.com.
Before you trade, you’ll usually create an account, complete identity verification and review the relevant product terms, disclosures and eligibility requirements. Available contracts, leverage limits, fees, funding schedules, maintenance margin levels and margin modes can vary by asset and user category.
The best perpetual futures contracts to trade aren’t the same for everyone. Many traders start their research with BTC and ETH because these markets typically have deeper liquidity and tighter spreads than smaller crypto assets.
Market quality can change the way a trade feels once it’s open. A contract with deeper liquidity and a tighter spread may give you cleaner entries and exits, while a more volatile contract can move toward a take-profit, stop-loss or liquidation level much faster than expected.
Crypto.com risk tools can help you define a trade before entry. You can choose isolated margin or cross margin where available, set take-profit and stop-loss levels and monitor margin health while the position remains open.
Crypto.com also uses account protection and regulatory compliance standards across its derivatives products. Before opening a position, it’s worth reviewing the contract details, funding rate, fees, margin rules and product availability for your jurisdiction.
Sometimes the opportunity is up. Sometimes it’s down. And sometimes it’s when TradFi markets are closed.
With Crypto.com Perpetuals, you can go long or short on supported crypto and stocks, with up to 5x leverage, no expiry date and built-in tools to manage risks.
See what you can trade with Crypto.com Perpetuals
Perpetual futures have no expiration date and use funding rates to track spot prices. Traditional futures expire on a set date and don’t require periodic funding payments.
Funding rates are calculated periodically. Holding positions during high-rate periods can mean making or receiving funding payments.
Select the contract, choose leverage and isolated margin, set stop-loss levels and execute a Buy/Long order.
Execute a Sell/Short order to take short contract exposure. The position gains value if the underlying asset price declines.
Isolated Margin limits potential loss to the margin assigned to that specific position, subject to platform rules and fees.
All trading carries risk, but lower leverage, pre-entry Stop-Loss orders and using regulated platforms such as Crypto.com could help manage risk.
Important information: This is informational content sponsored by Crypto.com and should not be considered as investment advice. Trading cryptocurrencies carries risks, such as price volatility and market risks. Before deciding to trade cryptocurrencies, consider your risk appetite. Services, features and other benefits referenced in this article may be subject to eligibility requirements, token holdings, and may change at the discretion of Crypto.com.
Trading perpetual contracts, futures, options, and other derivatives—including the use of margin and leverage—involves a high level of risk and may not be suitable for all users. You may lose all or more than your initial margin, and losses can occur rapidly due to volatility, leverage, or adverse market conditions. The use of leverage amplifies both potential gains and potential losses, and you should not trade with capital you cannot afford to lose. Liquidation may occur if maintenance margin requirements are not met, and funding rates, settlement mechanisms, expiry conditions, or pricing mechanisms may vary between instruments and trading sessions. Past performance is not indicative of future results, and no representation or warranty is made regarding future performance.
Readers should conduct their own independent research and due diligence and consult with qualified financial, legal, or other professional advisors before making any trading or investment decisions. You are solely responsible for evaluating the merits and risks associated with the use of any information, product, or service described in this article.
Cryptocurrency and derivative markets are subject to high volatility, regulatory uncertainty, and operational risks including, but not limited to, exchange outages, smart contract vulnerabilities, counterparty risk, and changes in applicable law or regulation. Product availability and leverage limits are subject to jurisdictional restrictions and applicable Terms and Risk Disclosures. Services, features, and other benefits referenced in this article may be subject to eligibility requirements and may change at the discretion of Crypto.com.
Crypto.com, its affiliates, directors, officers, employees, and agents make no representations or warranties, express or implied, as to the accuracy, completeness, timeliness, or reliability of the information contained in this article and disclaim all liability for any loss or damage arising from reliance on such information.
