Futures are contracts whose value is linked to an asset. Businesses have used futures to manage price uncertainty—for example, an airline may seek to manage future fuel costs or a farmer may plan around a future crop price. Crypto futures can also be used to hedge or speculate, but they are high-risk products and are not the same as owning the underlying asset.
Long, short and contract types
A long position benefits if the contract price rises; a short position benefits if it falls, before costs and contract rules. There are 2 broad contract types in the source overview: some futures have an expiry date—for example, a contract ending in September—while perpetual contracts do not have a stated expiry. Terms differ by product and venue.
Leverage increases exposure and risk
The source gives a simplified 10x example:
Risk controls do not remove risk
Take-profit and stop-loss orders can define intended exit levels, but execution, gaps, fees and market conditions can affect outcomes. A plan should specify position size, maximum exposure and when to stop. Futures regulation also differs by jurisdiction and product; do not assume that every crypto futures venue is authorized where you live.
Trading crypto derivatives can result in substantial or total loss. This is general education, not a recommendation to trade or use leverage.
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