What is a perpetual future?
A perpetual future is a contract that tracks a coin’s price without you owning the coin and without an end date. You can go long or short, usually with margin. An hourly funding payment between traders keeps its price close to the coin’s spot price. On Hyperliquid, the main perpetuals use USDC as margin, and profit and loss are paid in USDC.
- A perpetual is a contract on a coin’s price, not the coin. On Hyperliquid’s main perpetuals, margin goes in as USDC and profit or loss comes back as USDC.
- A long gains when the price rises and a short gains when it falls. Opening a short needs no coin to borrow, only margin.
- There is no expiry date. An hourly funding payment between longs and shorts does the job an expiry would, pulling the perpetual towards the spot price.
- Margin sets how much money backs the position. At 5×, a 10% move on a $1,000 position is $100: half of the $200 margin.
- If losses eat the margin down to a minimum, the venue closes the position. That is a liquidation, and its price is shown before the order goes in.
What a perpetual future is
A future is a contract to buy or sell something at a set price on a set date. A perpetual future, or perpetual, drops the date: the contract stays open until you close it, and its price follows the coin’s price for as long as it does.
You never hold the coin. You hold a position whose profit or loss follows the price: a long of 10 units opened at 100.00 gains $10 for every point the price rises, and loses the same for every point it falls. Close the position and the result is settled into your balance.
Because nobody has to deliver anything, the same contract works in both directions, and a position can be opened with only part of its value put down as margin.
Long, short and margin
A long profits when the price rises. A short profits when it falls, and on a perpetual it is opened the same way as a long, with no coin to borrow first. A short of the same size and entry wins exactly what the long loses, and loses what it wins.
Margin is the money set aside to back the position. At 5× leverage, a position worth $1,000 needs $200 of margin. Leverage does not change what a move pays: 10 units still move $10 a point. It changes how large that result is next to the margin, so a 10% move is half of it.
If the loss eats far enough into the margin, the venue closes the position before the margin runs out. For the long in the figure that happens near 82.05. How liquidation works explains where that price comes from.
Funding: what replaces the expiry date
A dated future meets the spot price on its last day, because it settles there. A perpetual has no last day, so something else has to stop its price drifting away from the coin’s. That is funding: a payment between longs and shorts.
When the perpetual trades above the spot price, longs pay shorts; when it trades below, shorts pay longs. Holding the crowded side costs money, which pays traders to take the other side and pulls the two prices together. On Hyperliquid funding is paid every hour, and the venue takes no cut.
For a position held for minutes, funding barely matters. For one held for days it is a running cost or income, charged on the position’s whole value, not on the margin. How funding works shows the arithmetic.
How a perpetual differs from buying the coin
Buying on a spot market gets you the coin. You pay its full price, you can withdraw it, and there is no funding, no margin and no liquidation. If the price halves, you still hold the same amount of the coin.
A perpetual gets you exposure to the price instead. You can short as easily as you go long, you put down only part of the value, and the venue can close you out if losses reach the margin. You pay or receive funding every hour while it is open.
Neither is better in general. They are different tools: spot for owning the coin, perpetuals for holding a view in either direction with a defined amount of money behind it.
On Hyperliquid
Hyperliquid’s perpetuals are linear: one contract is one unit of the coin, and profit or loss is that many units times the price move. Margin is USDC. Most markets are priced in USDT terms and are not converted, so one point of movement is one USDC per unit; a few, such as HYPE-USD, are priced in USDC directly.
The margin a position needs when it opens is size × mark price ÷ leverage. Each market has a maximum leverage, and a maintenance rate of half the initial margin at that maximum: 2.5% on a 20× market. Cross margin is the default; isolated margin is the other choice.
Two prices matter besides the last trade. The oracle price, a spot price drawn from several large exchanges, is what funding is measured against. The mark price, a median that blends the oracle with Hyperliquid’s own book and other venues’ perpetuals, is what margin, liquidation and take-profit and stop-loss triggers watch.
One position, four exits
Example numbersA position of 10 units opened at 100.00, worth $1,000, at 5× isolated on a market whose maximum leverage is 20×, so it ties up $200 of margin. Each row closes it at a different price, once as a long and once as a short, before fees and funding.
- Size, in units
- 10
- Position value
- $1,000
- Margin at 5×
- $200
- Long liquidation, isolated
- 82.05
| Exit price | Long | Short | Long, on its margin |
|---|---|---|---|
| 90.00 | −$100 | +$100 | −50% |
| 95.00 | −$50 | +$50 | −25% |
| 105.00 | +$50 | −$50 | +25% |
| 110.00 | +$100 | −$100 | +50% |
The venue would close the long near 82.05, 17.9% below entry, and the short near 117.07, 17.1% above it, a little closer. Fees come off every row, and funding adds or subtracts for as long as the position is held.
Mistakes that cost traders money
- Thinking you own the coin.
A perpetual is a contract on the price. You cannot withdraw a coin from it, and a liquidation can close it where a spot holder would still hold every coin.
- Forgetting funding on a long hold.
Funding is paid every hour on the whole position value. Over days it can cost more than the move you were waiting for.
- Believing leverage decides the profit.
Size decides what a move pays. 10 units move $10 a point at 2× or at 20×; leverage only changes the margin and how close liquidation sits.
- Assuming the perpetual always trades at the coin’s price.
Funding pulls the two together; it does not hold them equal. In a crowded market the perpetual can trade above or below spot for hours, and that gap is what funding charges for.
- Opening without reading the liquidation price.
The ticket shows it before the order goes in. If it sits close to where your idea would be wrong, the venue may close the trade before your stop does.
Try it in BuildTrade™
Open a paper long on any perpetual. Before you send it, the ticket shows Margin required and Est. liquidation; once it fills, the Positions tab shows its unrealised profit or loss as the price moves. Close it, open a short of the same size, and the same move shows the opposite result.
Contract specifications, Hyperliquid Docs (read October 20, 2026).
Margining, Hyperliquid Docs (read October 20, 2026).
Funding, Hyperliquid Docs (read October 20, 2026).
BuildTrade™ is independent of, and not endorsed by, Hyperliquid.