Crypto Newbie / Learn / futures
Crypto Futures on a CEX — How Perpetual Contracts Work
CEX perpetual futures (Binance Futures, Bybit, OKX) let you bet on price direction with leverage, without expiry. The mechanics are nearly identical to perp DEXes — same mark price, funding rate, liquidation logic — but with a custodial twist: the exchange holds your collateral, runs the matching engine, and operates the insurance fund. This simulator runs the same math on a CEX-style interface.
Margin mode
PnL
$0.00
Equity
$200.00
Liquidation price
$1,810.00
Maint 0.5%
-$0.60 → Funding payment over period
Perpetual futures vs traditional futures
Traditional futures have an expiry date — settlement happens, contracts roll. Perpetual futures (perps) don't expire. To keep the perp price (mark) anchored to spot (index), a funding rate is exchanged between longs and shorts every 8 hours. When mark > index, longs pay shorts; when mark < index, shorts pay longs. The funding rate is the magic that keeps perps tracking spot without ever needing settlement.
Mark price vs last price — the difference that matters
The LAST price is the most recent trade. The MARK price is a smoothed price designed to be hard to manipulate — typically a weighted average of recent trades on multiple spot exchanges plus a funding adjustment. Your PnL and liquidation are calculated against MARK, not LAST. This protects you from being liquidated by a wick on your specific exchange's order book; it also means your unrealised PnL display may differ from what a market order would actually realise.
Isolated vs cross margin
Isolated margin: each position has its own allocated collateral. If the position liquidates, you lose only that collateral; other positions are unaffected. Cross margin: all positions share the entire account balance as collateral. A winning position can absorb losses from a losing one, but if total equity drops to maintenance margin, ALL positions liquidate together. Beginners should default to isolated — caps blast radius per trade.
The hidden cost: funding payments compound
A long ETH perp at +0.05%/8h is paying 0.15%/day in funding. Hold for 30 days = ~4.5% gross funding cost. If ETH only moves +5% in that month, you net +0.5% before fees. Funding is the silent killer of long-held leveraged positions. Always check the current funding rate (Binance: Tradingview chart F&G tab) before opening a multi-day position.
Frequently asked questions
+Why do I see 'unrealised PnL' different from what my order would actually fill at?
Unrealised PnL is calculated against mark price (a smoothed average). The actual fill price depends on the current bid/ask on this specific exchange's order book. In thin books or fast markets the gap can be 0.5-2%.
+What's the difference between USDT-margined and coin-margined futures?
USDT-margined (linear): you post USDT collateral, PnL settled in USDT, math is straightforward. Coin-margined (inverse): you post the underlying coin (e.g. BTC) as collateral and settle PnL in coin. Coin-margined adds a second source of PnL (the coin you posted moves in price too). Beginners should use USDT-margined.
+Can I be liquidated overnight while sleeping?
Yes — crypto trades 24/7. Set stop-losses or reduce leverage if you're going to hold a leveraged position through periods you can't watch. Or only trade futures with leverage low enough that overnight gaps don't liquidate you.
+What is auto-deleveraging (ADL)?
When extreme volatility blows past liquidation prices and the exchange can't close positions at the calculated price, the loss is socialised. Highly profitable opposing positions get auto-closed to absorb the loss. Rare, but it's why even 'never get liquidated' setups can lose unexpectedly in flash crashes.
+What leverage do experienced traders actually use?
Median pro futures trader uses 2-5× leverage, not the 50-125× the exchange advertises. Higher leverage is for very short-term scalps, not for swing or position trades. The advertised max leverage is a marketing number.