# Perpetual Futures Trading FAQs

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Perpetuals trading services are provided by Trek Labs Europe Ltd (formerly FTX EU Ltd), registration number HE335683, with registered address at Aiolou & Panagioti Diomidous 9, Katholiki, 3020 Limassol, Cyprus. Trek Labs Europe Ltd (formerly FTX EU Ltd) is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 273/15. The company operates through[ https://eu.backpack.exchange](https://eu.backpack.exchange) (formerly[ http://www.ftx.com/eu](http://www.ftx.com/eu) and[ https://ftxeurope.eu)](about:blank) and uses the trade name Backpack EU (formerly FTX EU).

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**Looking for in-depth walkthroughs? Check out our Backpack Guides and Tutorials at** [**Learn.Backpack.Exchange**](https://learn.backpack.exchange/) **or our trading system docs** [**here**](https://guide.backpack.exchange/)**.**

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### <mark style="color:red;">What is a Perpetual Futures Contract (“PERP”)?</mark>

Perpetual futures are derivative contracts that track the price of an underlying asset but have **no expiry date**. You can hold them indefinitely, use leverage, and potentially profit from both rising and falling markets (for long and short positions respectively) without owning the underlying crypto.

### <mark style="color:red;">**How do I execute a PERP trade on Backpack EU?**</mark>

To execute a PERP trade:

1. **Log in** to your Backpack EU account and navigate to the [Futures Trading section](https://eu.backpack.exchange/trade/BTC_USDC_PERP).**‍**
2. **Choose your trading pair** (e.g., BTC-PERP).**‍**
3. **Select your order type** (market or limit order).**‍**
4. **Set your leverage and size**, then Buy/Long or Sell/Short.\
   Your position appears instantly in the Positions panel, and PnL updates in real time.

Your trade will be processed based on your order specifications and current market conditions.

### <mark style="color:red;">How do funding payments work?</mark>

Perps use an “index‐based” **Mark Price** and an 1-hour **funding interval**.

* If the perpetual trades above the index, longs pay shorts; if below, shorts pay longs.
* Funding occurs every hour.
* You’ll see funding accrued in your PnL panel before it settles in your balance.

### <mark style="color:red;">How is margin calculated and when will my position be liquidated?</mark>

Liquidations are triggered when your **Maintenance Margin** (based on Mark Price) hits the auto-close threshold. Your **Maintenance Margin Ratio (MMR)** must stay below 100 %. If Account Equity ÷ Position Notional ≥ MMR falls to 100 %, the liquidation engine will begin to close positions and/or sell collateral in an orderly fashion, The system first attempts to close via the order book, then, if needed, taps liquidity providers to protect against negative balances.

Note: Maintenance margin requirements vary by asset.

### <mark style="color:red;">What’s the difference between stop-limit and stop-market orders?</mark>

* **Stop-Limit:** Converts to a **limit** order once your trigger price hits. Execution is guaranteed only if there’s matching liquidity at your limit price.
* **Stop-Market:** Converts to a **market** order upon trigger, guaranteeing execution but at the best available price (which may suffer slippage).

### <mark style="color:red;">How do I adjust my leverage?</mark>

* Leverage is controlled by your **Max Account Leverage** setting in **Portfolio → Sub-accounts**.
* Lowering max leverage widens your maintenance buffer; raising it lets you open larger notionals against the same collateral.

### <mark style="color:red;">How are trading fees calculated on perps?</mark>

Perpetual futures share the same maker/taker tier schedule as spot. Maker fees apply when you add liquidity (post a limit order that rests); taker fees apply when you remove liquidity. Fees are deducted in USDC at order execution.\
Check our [fee structure](/exchange/trading-fees.md) for the most up-to-date information on trading fees.

### <mark style="color:red;">**What should I consider before placing a PERP position?**</mark>

Before clicking **Buy/Long** or **Sell/Short**, run through a quick mental checklist: make sure your **leverage and position size** are small enough that an ordinary price swing won’t liquidate you; confirm you have **sufficient liquid collateral** in the sub‑account.\
\
Note your **Maintenance Margin Ratio (MMR)** and the estimated liquidation price to leave a comfortable volatility buffer; check the **funding rate direction** so you’re not surprised by continuous payments that erode PnL; gauge **order‑book depth and market volatility** to anticipate slippage on entry and exit; pre‑define an **exit plan** with stop‑loss and take‑profit triggers (use Reduce‑Only and Conditional orders so they can trigger while you’re offline) ensuring the position **aligns with your broader strategy** whether hedging spot, capturing a basis, or taking a directional view.

### <mark style="color:red;">What are the risks associated with Perpetual Futures trading?</mark>

 Perp contracts amplify both gains and losses because they are highly leveraged instruments: even a 1 % adverse price move can translate into a double‑digit loss on a 10× position. If your **Maintenance Margin Ratio** falls to 100 %, the liquidation engine will automatically close positions—often at the worst possible moment.

Continuous **funding payments** add another layer of risk; being on the wrong side of a persistent positive or negative rate can drain your balance even when price drifts sideways. During periods of extreme volatility or thin liquidity, large market orders may experience **slippage**, widening entry or exit prices beyond expectations. Because Backpack settles PnL in real time, profits are swept into your balance—great when you’re winning, but it also means unrealised losses materialise quickly and eat into collateral. Finally, technical disruptions.\
\
Understanding these intertwined risks—and sizing positions conservatively—remains essential to long‑term survival in perp markets.<br>


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