What is Futures Trading?

Trading contracts on an asset's price rather than the asset itself — leveraged, able to profit in both directions, and able to liquidate you.

Futures trading means trading a contract that tracks an asset's price rather than the asset itself. In crypto, the dominant form is the perpetual future — a contract with no expiry, kept in line with the spot price by periodic funding payments between longs and shorts. Futures allow leverage (controlling a position many times larger than the margin posted) and make shorting as easy as buying, which is why active traders favour them for both directions of the market.

The power comes packaged with a mechanism spot traders never face: liquidation. Because losses come out of a small margin deposit, a move against an over-leveraged position can consume that margin entirely, and the exchange force-closes the trade — the position is gone even if price recovers minutes later. Funding fees also quietly tax positions held for days. Futures reward precise risk control and modest leverage; used with the sizing habits of a gambler, they are the fastest account-destruction tool in trading.