Leveraged derivatives change both exposure and risk. Margin, mark price, maintenance requirements and liquidation rules must be understood before leverage is used responsibly.
02
ESSENTIAL
Futures & Leverage
Understand perpetual futures, leverage, margin and the mechanics that can turn a normal market move into a liquidation event.
You should finish this path understanding notional exposure, collateral, effective leverage, liquidation risk and why exact exchange rules matter.
LEARNING PATH
6 lessons
Study in this order.
01
Intermediate
Futures & Perpetuals
Crypto futures and perpetuals are derivatives whose value is linked to an underlying asset. They provide directional exposure without requiring the same transaction as buying the asset in spot.
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02
Intermediate
How Leverage Works
Leverage allows a trader to control market exposure larger than the capital or margin supporting the position. It magnifies both favorable and adverse price movements relative to that capital.
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03
Intermediate
Margin
Margin is the collateral or financial resources supporting a leveraged derivatives position. Initial and maintenance requirements determine whether a position can be opened and kept open.
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04
Intermediate
Liquidation
Liquidation is the forced reduction or closure of a leveraged position when the required margin conditions are no longer satisfied under the venue's rules.
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05
Intermediate
Cross vs Isolated Margin
Cross and isolated margin determine how much account collateral can support a leveraged position. The exact implementation varies by exchange.
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06
Intermediate
Mark & Index Price
Crypto derivatives platforms commonly use reference prices such as an index price and mark price to reduce dependence on a single last trade when calculating unrealized P&L and liquidation conditions.
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Understand first. Apply second.
Work through the concepts until you can explain what each metric, structure or rule actually measures. Then test how it behaves in different market conditions. No individual concept should be treated as a guarantee of future price movement.
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