What Are Perpetual Futures?

A perpetual future is a contract that tracks the price of an asset — BTC, ETH, SOL — without ever expiring and without you ever holding the asset itself. You are not buying bitcoin. You are taking a position on its price, long or short, with the position living as margin and unrealized PnL on the exchange.

Three properties make perps the dominant instrument in crypto:

No expiry. A traditional future settles on a date. A perp rolls forever — you close when you decide, not when the calendar does. The mechanism that keeps its price glued to the spot price is the funding rate, which gets its own lesson.

Two directions. Shorting is as native as longing. You profit from a falling market exactly as easily as a rising one. Half the opportunities on any chart are invisible to spot-only traders.

Leverage. Your margin can control a position several times its size. This cuts both ways with perfect symmetry, and the next lesson treats it with the respect it demands.

What you actually hold

When you open 0.1 BTC long at 70,000, the exchange records: your entry price, your position size (notional = 7,000), your margin, and your liquidation price. Your PnL marks to the price tick by tick. Close the position and the difference settles into your collateral. That is the whole object — entry, size, margin, mark.

One mental shift before anything else: a perp position is a rented exposure with a running cost and a hard floor. Rent (funding), floor (liquidation). The rest of this module is those two things.