Trading Across Asset Classes · Futures Trading Guide
Crypto derivatives include contracts with scheduled settlement and products that continue through funding payments. Their names alone do not establish comparable protections.
Check the contract’s end condition
A dated future has a defined expiration or settlement process. A perpetual contract is designed to continue without a scheduled expiry, subject to the venue’s terms. Many perpetual products use periodic funding between long and short holders to help align the contract with a reference price. The formula, interval and payment direction depend on the product.
Include funding in the result
Assume a hypothetical perpetual position has $10,000 notional and owes 0.01% for one funding interval. That payment is $1. If notional and the rate stayed constant for three charged intervals, the total would be $3. Actual funding can change sign and magnitude. A positive price move can still leave a negative net result after funding, fees and execution costs.
Read collateral and liquidation rules
Cash margined and asset margined contracts can have different payout formulas. When collateral itself falls in value, available support for a position can shrink at the same time that trading losses grow. A mark price used for liquidation may differ from the last trade. Insurance funds and automatic deleveraging arrangements are venue specific and should not be treated as universal account guarantees.
Compare venues beyond the chart
Check legal access, regulation, custody, eligible collateral, withdrawal processes, outages and settlement benchmarks. A basis trade combining spot and a derivative retains execution, financing, liquidation and counterparty risks. Some dated products have additional daily adjustments, so verify terms rather than assuming all futures avoid recurring charges. Use the exact contract formula in every profit and stress calculation.
Try it yourself
A $20,000 hypothetical position pays 0.02% in funding once. How much is paid, and can tomorrow’s payment be assumed identical?
Show the worked answer
The payment is $4. Tomorrow’s rate, notional and payment direction can differ, so the same amount cannot be assumed.
Further reading
- Coinbase: Perpetual futures mechanics
- CME Group: Contract specifications
- CME Group: Position and risk management
Educational material. Prices, margins and strategy examples are hypothetical unless explicitly identified as contract specifications. They are not trade recommendations. Futures losses can exceed deposited collateral. Product terms and eligibility vary by venue and jurisdiction.
