Perpetual Futures
Perpetual Futures
Perpetual Futures mechanisms, position design, and principal risks
Derivatives & Options
Perpetual Futures is a subcategory of Derivatives & Options
PRODUCT OVERVIEW
Product Overview
Perpetual Futures create long or short derivative exposure under venue-specific contract rules. Funding and margin mechanisms are separate from spot asset ownership; perpetual-style products may have different maturity arrangements
Trading fees and funding
Leverage and liquidation
Investment Approach Key Risk Considerations Contract exposure and the meaning of perpetual Longs, shorts and position notional Index, mark and last-traded prices Funding and holding costs Initial margin, maintenance and liquidation Worked price and funding scenario Order entry and ongoing monitoring Applications and comparison with spot Disruption, leverage and portfolio concentration
01 / PRODUCT GUIDE
Investment Approach
Compare contract units, reference prices, collateral, funding, and margin mode. For a hedge, test quantity and basis matching, as well as the collateral required to maintain the position during stress
02 / PRODUCT GUIDE
Key Risk Considerations
Price moves, funding charges, collateral declines, and changing margin requirements can cause rapid losses or forced liquidation. Platform disruption and thin liquidity can prevent an orderly exit. Loss limits depend on the actual contract and account terms
03 / PRODUCT GUIDE
Contract exposure and the meaning of perpetual
A perpetual futures contract provides long or short price exposure under venue-specific derivative rules, generally without a scheduled expiry. It is not a spot asset balance and does not by itself provide ownership or transfer rights in the underlying asset. Some products described as perpetual-style have different contractual maturities or clearing arrangements and require separate review
Identify the reference asset, contract unit, collateral currency and payout formula. Linear contracts and inverse contracts calculate returns differently. The same advertised leverage on two products does not establish equivalent margin, settlement or loss behavior
04 / PRODUCT GUIDE
Longs, shorts and position notional
A long position benefits from a favorable rise in the reference price under its payout formula; a short benefits from a fall. Notional measures the economic exposure, while posted margin is collateral. Confusing these quantities can make a position look much smaller than the risk actually held
For a simple linear contract, quantity multiplied by the entry price gives initial notional. Changes in price change current notional and profit or loss. Position size should be understood independently from the margin fraction chosen to support it
05 / PRODUCT GUIDE
Index, mark and last-traded prices
A reference index can combine prices from specified markets, while a mark price is determined under the venue’s valuation method. The last-traded price is the result of a particular trade. Margin and liquidation may use a mark rather than the displayed last price
Read how abnormal inputs, outages and rapidly moving markets are handled. A difference between displayed trading prices and the valuation price can affect perceived risk. Reference-market quality and the ability to exit are distinct from a continuously calculated mark
06 / PRODUCT GUIDE
Funding and holding costs
Many perpetual designs use funding payments to help keep contract prices aligned with a reference market. Depending on the sign of the rate, one side pays and the other receives under the venue’s rules. The rate, notional basis, timing and caps are product-specific
Funding can vary during the holding period and is not guaranteed income. Calculate costs across expected holding intervals and stressed rates rather than assuming the present rate persists. Fees, spread and liquidation charges are separate from funding
07 / PRODUCT GUIDE
Initial margin, maintenance and liquidation
Initial margin permits opening a position; maintenance margin determines the collateral level required to keep it. Unrealized losses, changing requirements, funding debits and collateral price movements can reduce the available buffer. The venue can close a position under its rules when requirements are not met
Isolated margin assigns collateral to a specified position, while cross-margin arrangements use a wider account pool. The details determine which balances can be affected. Insurance funds, liquidation processes and deficit treatment vary, so neither a generic label nor the initial deposit alone proves a universal maximum loss
08 / PRODUCT GUIDE
Worked price and funding scenario
Assume a linear long exposure of 0.1 unit bought at $50,000, giving $5,000 notional. With $1,000 posted margin, the initial exposure is 5× that margin. Closing at $51,000 produces $100 gross price profit; closing at $49,000 produces a $100 gross price loss
If three funding intervals each charge 0.01% on an assumed constant $5,000 basis, total funding is $1.50. With $6 trading charges, the favorable simplified outcome is $92.50 and the unfavorable outcome is a $107.50 loss. Actual funding bases change, and liquidation is determined by maintenance and account rules, not this arithmetic alone
09 / PRODUCT GUIDE
Order entry and ongoing monitoring
Before submitting an order, confirm side, size, contract units, margin mode and the balances available to meet requirements. A limit price controls acceptable execution but not whether the order fills. Review how stop, reduce-only and conditional orders function on the chosen venue
During holding, monitor the mark, margin buffer, funding, collateral and related positions. A short intended as a hedge can overshoot or fail to match the asset exposure. Closing a contract removes its exposure but does not necessarily complete collateral withdrawal or banking settlement
010 / PRODUCT GUIDE
Applications and comparison with spot
Perpetual contracts can be analyzed for hedging an existing asset or taking directional exposure. A hedge must match asset, quantity, payout currency and relevant price source. Basis differences and funding costs can leave an imperfect offset
Spot assets require their own custody but do not impose a derivative maintenance-margin requirement when held without borrowing. Options have asymmetric contractual payoffs, unlike a simple linear perpetual. Choosing among them requires comparing rights, cash needs and failure paths rather than only the capital posted upfront
011 / PRODUCT GUIDE
Disruption, leverage and portfolio concentration
A large move, thin order book or venue interruption can impede an exit. Multiple contracts can share the same collateral or reference asset, creating correlated liquidation risks. Stablecoin collateral adds issuer and redemption exposure on top of the derivative
Stress the portfolio for price gaps, rising margin requirements, funding shocks and inability to transfer new collateral. A stop order may execute poorly or not at all during an interruption. Track both price loss and the immediate cash required to keep positions open
Frequently asked questions
Do I own the underlying crypto?
Not merely by holding a perpetual contract. It creates derivative exposure
Is funding always paid to shorts?
No. Direction depends on the funding sign and product rules
Is last price the liquidation reference?
Not necessarily. The venue may use a mark price and account-level requirements
Is 5× leverage a promise that liquidation occurs after a 20% move?
No. Maintenance, fees, funding, collateral and margin rules alter the threshold
Does a hedge eliminate all risk?
No. Quantity mismatch, basis, funding, collateral and venue risks remain
Nexora product information
Specific service arrangements and product terms will be published after confirmation:
- Underlying assets, contract form and margin currency
- Leverage limits, maintenance requirements and liquidation rules
- Funding calculations, fees, settlement intervals and supported jurisdictions
Price moves, funding charges, collateral declines, and changing margin requirements can cause rapid losses or forced liquidation. Platform disruption and thin liquidity can prevent an orderly exit. Loss limits depend on the actual contract and account terms. This website does not execute trades, open accounts or accept investment subscriptions.
Educational sources do not imply an affiliation, endorsement or identical product terms