# Guide to Perpetuals Trading

### What Are Perpetual Futures?

Perpetual futures, often called “perps”, are <mark style="color:$primary;">**derivative contracts**</mark> that let you <mark style="color:$primary;">**speculate on the price movement of an asset without owning it**</mark><mark style="color:$primary;">.</mark> Unlike traditional futures, perps <mark style="color:$primary;">**have no expiration date**</mark>**,** you can hold your position as long as you want (if you maintain sufficient margin).

With perps you can:

* <mark style="color:$primary;">**Go long**</mark> if you think the price will rise.
* <mark style="color:$primary;">**Go short**</mark> if you think the price will fall.

### Leverage & Cross Margin

#### Leverage

Perps allow you to use <mark style="color:$primary;">**leverage**</mark>, meaning you can <mark style="color:$primary;">**control a much larger position with a smaller amount of capital**</mark>. For example:

* With <mark style="color:$primary;">**5× leverage**</mark>, $10 of margin controls a $50 position.
* With <mark style="color:$primary;">**40× leverage**</mark>, $10 controls a $400 position.

⚠️ <mark style="color:$primary;">**Important**</mark>: Higher leverage <mark style="color:$primary;">**amplifies both gains and losses**</mark>**,** price moves against you can quickly eat into your margin and lead to liquidation.

#### Cross Margin Explained

On many platforms:

* <mark style="color:$primary;">**Cross margin**</mark> means your <mark style="color:$primary;">**entire account balance**</mark> is used as collateral across all open positions.
* This can <mark style="color:$primary;">**reduce the risk of liquidation**</mark> on a single trade because your whole balance can support it.
* But it also means <mark style="color:$primary;">**one bad trade can affect your entire balance**</mark>.

This is different from <mark style="color:$primary;">**isolated margin**</mark>, where only the specific amount you allocated to a position is at risk.

### How Trading Volume Is Counted

For Cede Hub’s challenges and incentives, <mark style="color:$primary;">**volume on perps counts based on the**</mark><mark style="color:$primary;">**&#x20;**</mark>*<mark style="color:$primary;">**position size**</mark>**,*** not just the margin you put in.

Example:

If you open a perp trade with <mark style="color:$primary;">**$10 margin and 5× leverage**</mark>, the <mark style="color:$primary;">**effective volume is $50**</mark> (10 × 5).

So even small margin positions can generate significant counted volume thanks to leverage.

This is key for meeting volume-based quests or rewards.

### Risks You Must Know

Perpetual futures are powerful but <mark style="color:$primary;">**high-risk**</mark> instruments. Before trading perps, understand the main risks:

#### Liquidation Risk

If the market moves against your position enough that your margin falls below the maintenance requirement, your position may be <mark style="color:$primary;">**automatically closed (liquidated)**</mark> to prevent further losses.

#### Amplified Losses

Leverage magnifies both profits *and* losses — a small adverse move can wipe out your margin rapidly.

#### Funding Rates

Perpetuals use a <mark style="color:$primary;">**funding rate mechanism**</mark> to keep contract prices aligned with the underlying (spot) price.

This means you may <mark style="color:$primary;">**periodically pay or receive funding fees**</mark> based on market conditions.

#### Cross Margin Exposure

Cross margining can expose your <mark style="color:$primary;">**entire balance**</mark> to risk if one trade goes very wrong.


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