What is Futures Trading?
Futures trading is the buying and selling of contracts whose value tracks an underlying asset, allowing traders to profit from price moves in either direction using leverage. In crypto, the most popular instrument is the perpetual future — a contract with no expiry that stays near the spot price through a funding mechanism.
Perpetual futures explained
A perpetual future never expires. Instead of settling on a date, it uses periodic funding payments between longs and shorts to keep its price anchored to the spot market. This lets traders hold leveraged long or short positions indefinitely.
Long vs short
Going long profits when price rises; going short profits when price falls. Because you can short, futures let you trade both up and down markets.
The role of leverage
Futures use leverage, so a small amount of margin controls a much larger position. This amplifies gains and losses, which is why risk management — and practice on a simulator first — is essential.
Frequently asked questions
What is a perpetual future?
A crypto futures contract with no expiry date that tracks spot price via funding payments between long and short traders.
Is futures trading risky?
Yes. Leverage magnifies both gains and losses, and positions can be liquidated. Practicing on a paper trading simulator first is strongly recommended.
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