What are perps
Perps, short for perpetual contracts, let you trade on the price movement of an asset without owning the asset itself. If you think the price will go up, you can open a position that profits when it rises. If you think the price will go down, you can open a position that profits when it falls.
They are called perpetual because they have no end date. You can keep a position open for as long as you like, and close it whenever you choose.
Going long or short
Every perps position is one of two directions:
Direction | You profit when | You lose when |
Long | The price goes up | The price goes down |
Short | The price goes down | The price goes up |
This is the biggest difference from regular trading. When you buy an asset normally, you only make money if the price rises. With perps, you can also trade falling prices by going short.
What is leverage
Leverage lets you open a position larger than the funds you put in. The funds you commit to a position are called your margin.
For example, with 100 USDC as margin:
At 2x leverage, you control a position worth 200 USDC.
At 10x leverage, you control a position worth 1,000 USDC.
Leverage multiplies both your gains and your losses:
A 5% price move on a 10x position changes your margin by 50%.
Higher leverage means the price does not need to move far against you before your position is closed automatically. This is called liquidation, and you can read more in What is liquidation.
Leverage also sets how much you can trade. Leverage is the multiplier you choose. Your balance multiplied by your leverage is your buying power, the total position size you can open. Learn more in What is leverage and buying power.
The good news: on Cronos app, each position is separate. The most you can lose on a position is the margin you put into it.
How perps are different from buying an asset
| Buying an asset | Trading perps |
You own the asset | Yes | No |
Profit from rising prices | Yes | Yes, with a long |
Profit from falling prices | No | Yes, with a short |
Leverage available | No | Yes |
Funds used | Your spot/predictions funds | Your perps funds, in USDC |
Your perps funds are separate from your spot/predictions funds. To learn how to move funds into them, see How to move funds between your spot/predictions and perps funds.
Questions
Can I lose more than I put in? No. Each position uses its own margin, and the most you can lose on a position is the margin you assigned to it. Other positions and the rest of your funds are not affected.
Do perps positions expire? No. A position stays open until you close it, or until it is closed automatically through liquidation. Note that keeping a position open has a small ongoing cost or benefit called the funding rate. See What is the funding rate.
What do I need to start trading perps? You need USDC in your perps funds. Cronos app moves funds over automatically if your perps funds balance is not enough to cover an order, or you can move them yourself. See How to move funds between your spot/predictions and perps funds.
Are perps riskier than regular trading? Yes. Leverage means prices moving against you can cause losses much faster than regular trading, up to the full margin on your position. Start with low leverage and small positions while you learn how perps behave.