How Perpetual Futures Work

A perpetual future tracks an asset’s price without a scheduled expiry. A long position gains when the price rises; a short gains when it falls. Margin supports the position, and funding payments apply while it is held under the exchange’s rules.

Calculate Profit or Loss

For a linear BTC contract:

Long P&L = BTC quantity × (exit price − entry price)
Short P&L = BTC quantity × (entry price − exit price)

Example: buy 1 BTC of perpetual exposure at 77,000 USDT and sell at 77,500 USDT. Gross profit is 500 USDT. Selling at 76,500 USDT produces a 500 USDT gross loss. Subtract trading fees and net funding paid to calculate the result after those costs.

Inverse contracts use a different formula. Read the contract type, quantity unit, and settlement asset in the market specification.

Bid, Ask, and Spread

Suppose the best bid is 76,999 and the best ask is 77,001. The spread is $2. Buying 1 BTC at the ask and immediately selling at the bid costs $2 before fees, assuming enough depth at both prices.

Larger market orders consume additional price levels. A limit order sets the maximum buy price or minimum sell price you accept.

Open and Close Exposure

Current Position	Order	Result in a One-Way Position Model
Flat	Buy 1 BTC	Long 1 BTC
Long 1 BTC	Sell 0.4 BTC, reduce-only	Long 0.6 BTC after the fill
Short 1 BTC	Buy 1 BTC, reduce-only	Flat after the full fill

Some exchanges also offer a hedge mode with separate long and short positions. Use the mode and position identifiers for the account you are trading.

Costs and Liquidation

Track entry and exit fees, funding payments, and any conversion or transfer charges. Leverage reduces the initial margin needed for a position and increases the loss relative to that margin when the market moves against you.

If equity falls below maintenance requirements, the exchange can liquidate exposure. See Margin & Liquidation for calculations and controls.