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Spot, futures and perpetuals: what you are actually buying
On spot you buy the coin. On a perpetual you buy a promise tied to its price. That difference decides what can happen to you.
Three instruments look identical on a chart and cost almost the same, yet they are built completely differently. Confusing them means not understanding where your risk comes from.
Spot
You hand over dollars and receive the coin. It is yours: withdraw it to a wallet, hold it for years, pay nobody anything. The position cannot go to zero from a price move — the coin simply gets cheaper. Liquidation does not exist on spot at all. Neither does leverage, unless you take a margin loan separately.
Dated futures
A contract: buy or sell the asset on a specific date at a specific price. It has a lifespan, and on expiry it settles against the underlying. Hence a property: the closer to expiry, the closer the future trades to spot. The gap between them is the basis, and it is a tradable quantity in itself. Crypto has dated futures, but that is not where the volume lives.
Perpetual futures
An invention of crypto exchanges: a future with no expiry. It can live forever — but then nothing forces its price to stay near spot. The mechanism that holds it is funding: a regular payment between longs and shorts, arranged so that deviation becomes expensive. The overwhelming share of crypto volume trades on perpetuals, and those are what our screener shows.
How they differ
| Spot | Dated | Perpetual | |
|---|---|---|---|
| You own the coin | yes | no | no |
| Lifespan | forever | until expiry | forever |
| Leverage | usually none | yes | yes |
| Liquidation | impossible | possible | possible |
| Funding | none | none | every 8 hours |
| Shorting | awkward | simple | simple |
One idea, three outcomes
You believe a coin goes from 2.00 to 2.40, but dips to 1.70 first. On spot you bought $1000, sat through the drawdown and exited with $1200. On a perpetual at 5x, liquidation sat near 1.62 — you survived, barely, and paid funding. At 10x liquidation was 1.82: the position died on the way to your own correct target. Same idea, the instrument decided everything.
Treating a perpetual as "spot with leverage"
A perpetual is not a coin. It has its own price, which can drift percent away from spot in a panic; its own book, thinner than spot on small coins; and its own funding, charged whether you are in profit or not. Holding a perpetual for six months "as an investment" means paying for that pleasure for six months. Do the sum: 0.01% every eight hours is 11% a year, and it is often three times that.
Index and mark price
Liquidation is computed NOT from the last trade on this exchange but from the mark price, derived from an index averaged over several major venues. This is deliberate: otherwise one thin exchange could be spiked with a large order to knock out everyone with liquidation nearby. Practical consequence: if you see a wick reaching your liquidation price and you were not taken out, the mark price never went there.
What to pick for the job
- Hold for months and forget — spot. No liquidation, no funding.
- Intraday trading — perpetual. Deeper liquidity, easy shorting, leverage available.
- Hedging a spot position — a perpetual short of the same size.
- Earning on the spot-futures gap — basis arbitrage, a separate topic with separate risks.
Our screener collects perpetual futures from nine exchanges — that is where the volume lives and where funding and open interest exist. For each coin you can see how many venues list it: the more, the harder its price is to spike on any single exchange.
Open the screenerWhy can you lose more on a perpetual than on spot with the same forecast?
Because spot survives any drawdown — the coin simply gets cheaper and waits. A leveraged perpetual has a liquidation price, and if the drawdown reaches it the position closes before your forecast comes true. A forecast can be right and the trade still lose: those are different things.
Funding is +0.01% every 8 hours. What is that per year?
Three times a day × 365 = 1095 payments × 0.01% ≈ 11% a year on position size. Nothing for a day trade; a serious chunk of expected profit for a six-month position. And that is a mild rate: in a hot market it reaches 0.1% per period, which is over 100% annualised.