> For the complete documentation index, see [llms.txt](https://docs.tryliquid.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tryliquid.xyz/about-liquid/what-are-perpetual-futures.md).

# What are Perpetual Futures?

Perpetual futures (perps) let you go long or short on crypto, stocks, commodities, and FX with leverage and no expiry date. Learn how perps, funding, and multipliers work on Liquid.

Perpetual futures, usually called **perps**, are contracts that let you go long (bet the price goes up) or short (bet the price goes down) on an asset without owning the underlying asset directly. Perps are the most traded derivative in crypto, and on Liquid the same instrument gives you 24/7 exposure to stocks, pre-IPO companies, commodities, indices, and FX as well.

### Perps vs. Traditional Futures

Unlike traditional futures, perpetual futures do not have an expiration date. You can hold a perp for a minute or a year. To keep the perp price close to the underlying market price, exchanges use a mechanism called **funding**: a small periodic payment between longs and shorts. When the perp trades above the underlying, longs pay shorts, which nudges the price back down. When it trades below, shorts pay longs. Read more in [Funding Rates](/trading/funding-rates.md).

### Perps vs. Buying the Asset

|              | Buying the asset (spot)            | Perpetual futures                         |
| ------------ | ---------------------------------- | ----------------------------------------- |
| Direction    | Long only                          | Long or short                             |
| Leverage     | 1x                                 | Up to 50x depending on the market         |
| Market hours | Exchange hours for stocks          | 24/7/365 on Liquid                        |
| Ownership    | You hold the share, coin, or metal | You hold a contract that tracks the price |
| Expiry       | None                               | None                                      |
| Ongoing cost | None                               | Funding payments                          |

### Why Trade Perpetual Futures on Liquid?

* **Every asset class in one account.** Trade Bitcoin, Nvidia, gold, the S\&P 500, EUR/USD, and pre-IPO names like SpaceX and OpenAI with the same USDC balance.
* **Around-the-clock markets.** Stock and commodity perps on Liquid trade nights, weekends, and holidays, so you can react to news the moment it breaks.
* **Multipliers.** Choose your own leverage from 1x up to 50x, depending on the market.
* **Short selling made simple.** Shorting a perp is one tap. There is no borrowing, no locate, and no margin call from a broker.
* **Non-custodial.** Your collateral stays in a wallet only you control.

### Example

If you open a 5x long on AAPL with $100 of collateral, you control a $500 position. If AAPL moves up 10%, your position gains roughly $50, a +50% return on your collateral (before fees and funding).

If it moves down 10%, your loss is magnified in the same way, and you lose roughly $50. If the price keeps moving against you, the position can be [liquidated](/trading/liquidations.md) once your collateral can no longer cover the loss. Setting a [stop loss](/trading/take-profit-stop-loss.md) is the simplest way to cap that risk.

### Key Terms

* **Collateral (margin):** the USDC you put behind a trade.
* **Multiplier (leverage):** how many times your collateral your position is worth.
* **Notional:** the total size of the position (collateral × multiplier).
* **Mark price:** the fair reference price used to calculate PnL and liquidations.
* **Funding rate:** the periodic payment between longs and shorts.
* **Liquidation price:** the price at which your position is closed because collateral has run out.

See [Leverage & Margin](/trading/leverage.md) for the full mechanics.