How Crypto Expiry Perpetuals Work: Funding, Margin, and Liquidation
Summary
The document explains X-Perps, leveraged crypto contracts that track an underlying asset without requiring ownership of it. Traders can take long or short positions, use up to 10x leverage, and post several crypto assets or stablecoins as margin. Unlike spot holdings, these contracts use periodic funding payments to help keep contract prices aligned with spot prices. Open positions are cash settled on a fixed date five years after issuance.
It describes the effects of leverage with an example, and outlines funding, maintenance margin, liquidation, mark prices, and settlement. Funding transfers between long and short holders every eight hours; mark prices inform unrealised profit and loss and liquidation checks. The document is a product overview rather than an independent market study: it provides no performance data or trading strategy, and its mechanics and availability are specific to the named platform and eligible EEA customers. It emphasizes that leverage magnifies losses as well as gains and that liquidation can occur quickly.
Key ideas
- X-Perps provide leveraged long and short exposure to crypto prices without transferring ownership of the underlying asset.
- Leverage magnifies gains and losses relative to the margin posted.
- Funding payments between position holders occur every eight hours and help align contract and spot prices.
- Liquidation checks use a mark price and can close a position when margin falls below the maintenance requirement.
- Open positions are cash settled at a fixed expiry five years after contract issuance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.