What Is Perps Trading? Perpetual Futures Explained

Perps trading is the trading of perpetual futures: derivative contracts that track an asset's price and let you go long or short with leverage, but — unlike traditional futures — never expire. Instead of converging to spot at a settlement date, a perpetual contract stays anchored to the underlying price through a funding rate: a periodic payment exchanged directly between longs and shorts. Hold a position and you continuously pay or receive funding depending on which side of the imbalance you're on.

Invented for crypto in 2016, perps are now the dominant way the market trades direction — perpetual volume routinely runs at a multiple of spot volume across both centralized and on-chain venues. This guide explains the machine from first principles: funding, mark price, leverage and liquidation, then why perps won, the mistakes that cost beginners the most, and where automation honestly helps.

Published June 10, 2026. Last updated June 10, 2026.

No expiry, and the funding rate that replaces it

A dated future converges to spot because settlement forces it to. A perpetual has no settlement, so it needs another anchor — that anchor is funding. At regular intervals (commonly hourly or every eight hours, depending on the venue), the contract compares its own price to the spot index. Trading above spot? Longs pay shorts, which nudges the premium down. Below spot? Shorts pay longs.

Funding flows between traders, not to the exchange, and it is a real carrying cost: a persistently positive funding rate means being long costs you a steady drip even when price goes nowhere. Experienced traders read funding as a sentiment gauge — heavily positive funding signals a crowded long side — and entire strategies exist purely to harvest it. As a beginner, the minimum is knowing it exists and checking it before you hold anything overnight.

Mark price vs last price

Exchanges track two prices for every perp. The last price is simply the most recent trade. The mark price is a smoothed, index-anchored estimate of fair value — typically built from spot prices across several venues — and it, not the last price, is what your unrealized P&L and liquidation are calculated against. The reason is manipulation resistance: on a thin book, one aggressive order can spike the last price; the mark price is much harder to push. Practical consequence: you can be liquidated when the mark price crosses your threshold even if the last traded price hasn't, and vice versa. Always know which price your venue uses for what.

Leverage and margin

Leverage means controlling a position larger than your collateral. Post $1,000 of margin at 10x and you control a $10,000 position: a 1% move in the asset is a 10% move in your equity, in either direction. Venues commonly offer up to 25x, 50x or more on major pairs.

Two margin modes matter. Isolated margin walls off a fixed amount per position — that's the most you can lose on it. Cross margin lets your whole account balance back every position, which makes liquidation less likely per position but puts your entire balance behind your worst trade. The honest framing of leverage: it doesn't improve your odds, it compresses your timeline. The same edge that compounds at 2x can be liquidated into nothing at 50x by ordinary noise.

Liquidation: how positions actually die

Every leveraged position has a maintenance margin — the minimum equity required to keep it open. When losses push your margin below that line, the exchange force-closes the position; depending on the venue, the remainder is absorbed by an insurance fund, a backstop vault, or auto-deleveraging of traders on the other side. You don't get to choose the exit price.

The key mental shift: liquidation price is a function of your leverage, not your conviction. At 50x, a roughly 2% adverse move ends the position; at 5x you can survive an ordinary pullback. Funding payments, fees and the mark/last distinction all shave the buffer further. Most liquidations aren't bad market calls — they're correct directional ideas sized so aggressively that normal volatility killed them before the thesis could play out.

Why perps dominate crypto volume

Perpetuals routinely trade multiples of spot volume, and the reasons are structural. One contract gives you both directions — shorting is as easy as longing, with no borrow to arrange. Capital efficiency: leverage means less collateral per unit of exposure. No expiry means no quarterly roll, so a position is just a position. Liquidity concentrates in a single contract per asset instead of fragmenting across expiry dates, which tightens spreads and attracts more liquidity in a feedback loop. And for hedgers — miners, funds, market makers — perps are the cheapest always-on hedge in the market. The result: for price discovery in crypto, the perp market often leads spot rather than following it.

Common beginner mistakes

Oversizing is the killer. Maximum leverage turns routine volatility into account-ending events; most experienced perp traders run far below the venue cap. Ignoring funding comes second — a 'free' position held for weeks against persistent funding quietly bleeds. Trading without a stop, or moving the stop when it's about to trigger, converts small planned losses into liquidations.

Then come the execution errors, which are less discussed and just as expensive: revenge-trading immediately after a loss, doubling down to defend a losing entry, closing winners in hours while letting losers run for days, and abandoning a tested plan mid-trade because of a candle. Crypto's 24/7 schedule amplifies all of it — markets move while you sleep, and tired decisions at 3 a.m. are reliably worse than rules made in daylight. Notice the pattern: almost none of these are analysis failures. They are discipline failures at the moment of execution.

How scored signals and automation reduce execution errors

If most beginner losses come from execution rather than analysis, the highest-leverage fix is making execution mechanical: a rules-based strategy tested against history, position sizes set in advance, stops that are part of the system instead of a negotiation, and a process that doesn't sleep. That's the design behind Signalview, our platform for Hyperliquid perps. Each strategy is backtested over 18 months and compressed into one score from −100 (strong short) to +100 (strong long), so you can judge a setup on evidence instead of stacking indicators.

From there, a non-custodial AI agent can trade the signal 24/7: it runs on a scoped agent key that can only place perp orders — it can never withdraw, and funds stay in your own wallet — and an LLM confirms each setup against live market context before execution, vetoing trades that no longer hold. It's free to run; you pay only Hyperliquid's normal trading fees. Automation enforces the plan a tired human abandons — that, not prediction, is what it's for.

Risk note: perpetual futures are leveraged, high-risk instruments — you can lose your entire margin, and no signal, score or automation removes that risk.

Frequently asked questions

What is Signalview?

Signalview compresses real trading strategies into a single TradingView-style score and lets non-custodial AI agents trade them on Hyperliquid perpetuals 24/7. Every signal is backtested over 18 months before it's listed, covers timeframes from 15 minutes to 3 days, and is free to run — you only pay Hyperliquid's normal trading fees.

How do AI agents trade on Hyperliquid?

You deploy an AI trading agent with a scoped key that can only place perp orders on Hyperliquid — it can never withdraw your funds. The LLM confirmation step is what makes it an AI agent rather than a rule-based bot: it reads the signal's score, sanity-checks the setup against live market context, then executes around the clock.

Is Signalview a TradingView alternative?

Signalview offers TradingView-style charts and scored signals on the same major crypto markets and timeframes, then adds the execution layer charting tools lack: AI agents that trade the signal for you on Hyperliquid automatically. Where TradingView fires an alert you still have to act on, Signalview's agent places the order itself.

Is it non-custodial?

Yes. Your keys and funds stay in your own wallet at all times. Agents use Hyperliquid's native agent-key architecture: a scoped, revocable key that can place and cancel perp orders but can never withdraw, transfer, or touch spot balances. You can revoke the key from the Agents page at any moment.