perpetual futures, or perps, are contracts that track an asset’s price with no expiry date, letting you go long or short with leverage. funding payments between longs and shorts help keep the contract close to the underlying market.
the three parts to remember.
long and short.
a long benefits when price rises. a short benefits when price falls.
leverage.
leverage increases exposure relative to margin, which magnifies both gains and losses.
funding.
periodic payments between sides help keep the perp price aligned with spot.
why it matters.
understanding the term helps you recognize what can change the outcome of a trade and which questions to ask before acting.
simple language does not remove market risk, but it makes the decision easier to understand.
educational information only. trading crypto and using leverage can result in loss.
