Derivatives / Futures

Derivatives are how most crypto volume actually trades, and they are the fastest way for an ordinary participant to lose everything. This section explains the instruments and reports what happens in them, without encouraging you to use them.

Coverage includes perpetual futures and the funding rate that keeps them tethered to spot, open interest and what it says about positioning, options activity, and liquidation cascades — the violent moves that follow when many leveraged positions are closed at once because traders had clustered their stops and leverage at similar levels.

The part to internalise: leverage does not simply amplify a loss, it can end the position before any recovery. A liquidation closes you out at the venue's speed and discretion, not yours, and your collateral is gone regardless of what the price does an hour later. Combine that with drawdown arithmetic — a 60% fall requires a 150% gain to get level — and the reason most leveraged accounts do not survive becomes clear.

We report funding rates and open interest as observations about positioning, not as signals. Extremely positive funding tells you longs are paying to stay in; it does not tell you what happens next, and it has preceded both continuations and violent reversals.

Our position size calculator deliberately does not model margin or liquidation prices, which are venue-specific. Read risk management first. Nothing in this section is financial advice.

A note on the instruments themselves: a perpetual future has no expiry, so instead of settling it uses a periodic funding payment between longs and shorts to keep it near the spot price. That means holding a position has a running cost or credit you may not have accounted for, and in strongly trending markets that cost compounds. Read the funding mechanism before assuming a leveraged position is free to hold.