Short answer
Spot trading means buying the coin itself, with no multiplier and no liquidation. Traditional futures are contracts on a price with a fixed expiry date. Perpetual futures (perps) are like futures without an expiry: you can hold them as long as you want, and a funding payment between longs and shorts keeps their price close to spot. Futures and perps let you go long or short with a multiplier, which makes gains and losses bigger and adds liquidation risk.
People use "futures", "perps" and "leverage trading" as if they were the same thing, and "spot" as the opposite. That is roughly right, but the details decide what you pay, how long you can hold, and how you can lose. This page compares all three on the same Bitcoin move.
Part of our perps for beginners guide.
What is spot trading?
Spot trading means buying or selling the coin itself, paid in full, right now. If you buy $10 of Bitcoin on spot, you own $10 of Bitcoin.
- Direction: you profit only if the price goes up (unless you already own coins to sell).
- Multiplier: none. A 5% move is 5% for you.
- Liquidation: none. The coin can fall, but your position cannot be closed by force.
- Holding cost: none, apart from trading fees.
Spot is the simplest form of trading. It is also the slowest: to make $5 on a 5% move, you need $100 in.
What are futures?
A futures contract is an agreement on a price for a future date. Traditional futures have an expiry, for example the end of the quarter, when the contract settles.
- Direction: long (up) or short (down).
- Multiplier: yes. You put up margin and control a bigger position.
- Liquidation: yes, if the price moves too far against your margin.
- Expiry: yes. To keep a position, you close it and open the next contract, called rolling.
Before expiry, a futures price can sit above or below spot, depending on demand and interest rates. At expiry it converges to spot.
What are perpetual futures?
Perpetual futures, or perps, are futures with no expiry date. You can hold a perp for a minute or a year.
Without an expiry to pull the price toward spot, perps use funding: a small payment every so often between longs and shorts. When the perp trades above spot, longs pay shorts, and the other way around. That nudges the perp's price back toward the real price. On Hyperliquid, funding is paid every hour. More: funding rate explained.
Perps are the most traded crypto product. Hyperliquid is built around them. Full beginner explainer: what are perpetual futures?.
How do they compare side by side?
Spot owns the coin; futures and perps bet on its price, with a multiplier, and differ on expiry and funding.
| Item | Spot | Futures | Perpetual futures (perps) |
|---|---|---|---|
| You own the coin | Yes | No | No |
| Go short | Only if you hold coins | Yes | Yes |
| Multiplier | No | Yes | Yes |
| Liquidation | No | Yes | Yes |
| Expiry | None | Fixed date | None |
| Holding cost | None | Built into the price, plus rolling | Funding, usually hourly |
| Typical use | Long-term holding | Hedging, dated bets | Trading, copy trading |
What does the same 5% Bitcoin move do in each?
Spot makes 5%, a x5 perp makes about 25% before costs, and both multiply losses the same way. Here it is with $10.
| $10 in | Position | BTC +5% | BTC -5% | BTC -20% |
|---|---|---|---|---|
| Spot | $10 of BTC | +$0.50 | -$0.50 | -$2.00 |
| Perp x5 (long) | $50 | +$2.50 | -$2.50 | Liquidated, about -$10 |
| Perp x10 (long) | $100 | +$5.00 | -$5.00 | Liquidated, about -$10 |
On a x10 Bitcoin perp, liquidation happens after a drop of about 9%. On spot, a 20% drop is painful but you still own the coin and can wait. See how to calculate liquidation price.
What does each one cost?
Spot pays a trading fee on what you buy. Perps pay a fee on the full position, plus funding. Futures pay fees and the cost of rolling.
On Hyperliquid, perps cost 0.045% of the position per side at the base tier on main markets, and 0.09% on stocks, gold and indices. Through CopyHype, add 0.1% per side.
| $10 at x5 on BTC perps (position $50) | Per side | Round trip |
|---|---|---|
| Hyperliquid | about $0.0225 | about $0.045 |
| CopyHype | $0.05 | $0.10 |
| Total | about $0.15 |
Funding comes on top: a few cents a day on a $50 position in normal markets, paid or received.
Why do traders use perps instead of spot?
For three reasons: going short, using a multiplier, and trading many markets from one balance. On Hyperliquid, one USDC balance trades crypto, and through HIP-3, stocks, gold and indices.
- Short. Bet on a price falling without owning anything. See long vs short.
- Multiplier. Smaller amounts move bigger positions. This is the dangerous part.
- One balance. No need to buy each asset.
- Copyable. On Hyperliquid every perp trade is public, so traders' records can be checked and copied.
What about margin trading and leverage tokens?
They are two more ways to get a multiplier, each with its own catch. Margin trading borrows money to buy spot; leverage tokens package a multiplier into a token.
| Item | How the multiplier works | Main catch |
|---|---|---|
| Spot margin trading | You borrow to buy more of the coin | Interest on the loan, and liquidation |
| Leverage tokens | A token that tracks, say, 3x the daily move | Daily rebalancing erodes value in choppy markets |
| Perps | The contract itself is leveraged | Funding, and liquidation |
On Hyperliquid, the main product is perps. Leverage trading, futures trading and margin trading are words people often use loosely for the same thing: a position bigger than the money behind it.
How do I hedge with perps?
By opening a short perp against coins you hold on spot, so a fall in price is offset by the short's gain. This is how many funds use perps.
Example: you hold $500 of ETH on spot and worry about a drop this week. You open a $500 short ETH perp at x2, with $250 of margin. If ETH falls 10%, your spot loses $50 and the short gains about $50, minus fees and funding. If ETH rises 10%, the spot gains $50 and the short loses about $50. You have parked your exposure without selling. Hedging is not free: fees, funding and the risk of liquidation on the short if the price rises sharply all apply.
Which should a beginner choose?
For holding a coin long term, spot. For learning to trade up and down, perps at a low multiplier, with practice money first. Traditional futures are rarely the right first step.
- Open @copyhypefamilybot in Telegram. Tap Start, then Open the app.
- Use the free practice money. $1,000 of practice money on live Hyperliquid prices for 24 hours, plus 24 hours per invited friend whose first trade opens.
- Trade solo at x2 to x5. Pick BTC, up or down, from $5 a trade.
- Or copy a whale. Watch how an experienced trader uses perps.
- Compare with spot. Note what the same move would have done without a multiplier.
Frequently asked questions
Are perps the same as futures?
They are a type of futures contract without an expiry date, using funding instead. People often say "futures" when they mean perps.
Is spot safer than perps?
Spot has no multiplier and no liquidation, so a single bad move cannot wipe out the position. That makes it lower risk, not risk-free.
Do I own Bitcoin when I trade a Bitcoin perp?
No. You hold a contract that tracks Bitcoin's price. You cannot send it to a wallet as Bitcoin.
What is a perpetual swap?
Another name for a perpetual future. Same product.
Can I trade stocks as perps?
Yes, on Hyperliquid through HIP-3 markets. See stocks, gold and oil on Hyperliquid.
Keep reading
- What are perpetual futures? Perps explained like you're tenPerpetual futures explained in plain words: a bet that a coin goes up or down, with a multiplier, no expiry and a max loss you choose. Examples.
- Leverage explained: what x5, x10 and x50 really do to your moneyCrypto leverage explained simply: what x10 means in dollars, how far price can move before liquidation at each multiplier, and how to pick one.
- Long vs short: how to bet a coin goes up or downWhat going long and short mean in crypto perps, how shorting works without owning the coin, examples in dollars, and each side on Hyperliquid.