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Perpetual Futures, and Whether You Should
What are perpetual futures, and how do leverage, funding and liquidation actually work in rupees?
A perpetual future is a leveraged position with a liquidation price built in, and funding paid every 8 hours to keep it near the spot price. Work out the liquidation price and the funding cost in rupees before you enter, and practise unleveraged first.
Module 2 · Chapter 5 of 5 · ~4 min read
The last chapter showed the four forces behind a big move. Knowing those forces does not hand you the next one.
Perpetual futures let you bet on that move with borrowed size. So the exit price deserves your attention before the entry price.
Start With the Exit
A perpetual future is a leveraged position with a price written into it. At that price, the exchange closes you out and your margin is gone.
At 20x leverage, a 5% move against you ends the trade. BTC has covered a 5% move inside a single day many times.
No unusual news is needed for a daily move of that size.
- 20xa 5% move ends the trade
- ₹10,000margin controlling ₹1,00,000 at 10x
- ₹30/dayfunding cost at 0.01% per 8 hours
- ~10%adverse move that wipes out that margin
What a Perpetual Future Is
A perpetual future is a futures contract with no expiry date. Because it never settles, it needs another way to stay near the spot price.
That job falls to funding, a small payment made every 8 hours. The crowded side pays the other side to keep the two prices close.
Longs pay shorts when the crowd leans long. Shorts pay longs when the crowd leans short.
Funding is a running cost for as long as you hold the position. At 0.01% per 8 hours, it works out to 0.03% a day.
On ₹1,00,000 of exposure, that comes to about ₹30 a day. When one side gets heavily crowded, the rate can run several times higher.
Funding is charged whether the position is winning or losing.
Margin Is Not Your Position
Your margin is not the size of your position. ₹10,000 of margin at 10x leverage controls ₹1,00,000 of BTC.
Your profit and loss are calculated on the full ₹1,00,000. Your entire buffer is the ₹10,000 you put in.
That gap between margin and position is what makes leverage both powerful and dangerous.
Liquidation follows arithmetic that you can work out in advance. On that ₹10,000 margin, roughly a 10% adverse move takes it to zero.
Fees and funding bring that zero point a little closer. So write the liquidation price down in rupees before you place the order.
Where This Trades, and What Leverage Does Not Do
In India, perpetual futures trade on an INR-settled derivatives venue such as Delta Exchange India. That is a separate account from the spot exchange you already use.
The record-keeping discipline from Module 1 does not get easier here. It gets harder, because there are far more transactions to track.
For the step by step mechanics, read how a perpetual futures trade is placed on Delta Exchange.
Leverage multiplies an edge that already exists, and it never creates one.
A method that wins 55% of the time is still right 55% of the time at 10x. Leverage only adds a liquidation price underneath that same method.
Eleven wins in twenty trades stay eleven wins at any leverage setting. The size of the edge does not change.
The Honest Gate
The honest gate is one question with four parts. Can you state your edge, your size in rupees, your stop and your liquidation price?
If you have to look any of the four up, the trade is not sized yet.
Practise unleveraged first, through a full spot round trip. This chapter is education, not a recommendation to trade.
Key takeaways
- A perpetual future has a built-in liquidation price where your margin is gone.
- It never expires, and funding keeps it near the spot price every 8 hours.
- Margin is not your position, so profit and loss run on the full size.
- Liquidation is arithmetic, so roughly a 10% move against ₹10,000 margin wipes it out.
- Leverage multiplies an edge that already exists, and it never creates one.
- Practise unleveraged first, and clear all four parts of the gate before sizing.
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Educational & illustrative only — not investment advice. Drishti Pro publishes AI-generated trade ideas and their public track record for information. Crypto is volatile and you can lose money. Nothing here is a recommendation to buy or sell any asset. Do your own research.