Risk Updated 2026-08-31 By Ivo Renner

Perpetual futures risk checklist: fourteen questions before the first trade

Not a disclaimer in list form. Fourteen specific things you can look up in about ten minutes, each of which is cheap to check now and expensive to discover later. If you cannot answer one of them, that is the answer.

How to use this

A TradFi perpetual is a leveraged derivative on an index that Binance constructs, trading 24/7 against an underlying market that is open roughly a third of the week. That combination produces failure modes that do not exist in either stock trading or crypto trading on their own, and most of them are visible in advance if you look.

So this is a lookup exercise, not a meditation. Each question below has a factual answer that lives on a screen you can open right now: the order form, the order book, the contract's parameters panel, your own account. Work through them in order for your first position on any contract you have not traded before. After that, questions two through six take under a minute and are worth repeating every time. All fourteen assume the contract is reachable from that account in the first place; if the [TradFi] tab has never appeared on your screen, read the four gates standing between a registration and a live position before this list rather than after it.

For each one we have written what a bad answer looks like, because the useful signal is rarely "I don't know" — it is usually a confident answer that turns out to be about the wrong thing.

The fourteen questions

1. Do you know this is not a share?

   Holding AAPLUSDT gives you no ownership of Apple, no dividend and no vote. Binance's own page describes these as contracts "allowing users to trade on the price movements of these assets without needing to own them directly". What you hold is a USDT-denominated derivative on a price index, and everything else on this list follows from that sentence.

   A bad answer: "It's basically the same as buying the stock, just with leverage." It is not. A share has no funding cost, no liquidation price, no mark price and no index construction between you and the company. Start with what a TradFi perpetual actually is.

2. Do you know your liquidation price?

   Not roughly. The number, in the same units as the chart, before you click buy: the price at which the position gets closed for you, and the single most important figure attached to it.

   A bad answer: "I'll be stopped out long before that." Stops are not guaranteed, gaps skip them, and liquidations are triggered off the mark price rather than the last trade. Put your entry, size and leverage through the liquidation price calculator first, then decide whether the position is one you want.

3. Is your margin isolated or cross?

   Isolated margin generally confines the collateral backing that position to the assigned amount; cross margin can draw on the wider futures wallet. Isolated does not guarantee an exact worst case because gaps, execution, fees and platform rules still matter. Check which mode is set on this contract — it is per-contract, and it is whatever you left it on last time.

   A bad answer: "I didn't change it." See cross, isolated and Multi-Assets Mode. For a first position on an unfamiliar contract, isolated is what bounds the size of the mistake.

4. What is the maximum leverage tier for your position size?

   The headline number on a contract — 5× on TSLAUSDT, 25× on much of the newer roster — is the top rung of a ladder that applies only to the smallest notional bracket. As your position grows, available leverage steps down and the maintenance margin requirement steps up, which moves your liquidation price closer while you are doing nothing at all.

   A bad answer: quoting the number from the launch announcement. Open the contract's tier table in the interface and read the bracket your notional actually falls into. Leverage tiers and liquidation explains how the ladder moves the number in question two.

5. How thin is this contract's order book?

   The 29 August 2026 archive of 72 contracts recorded the same tick size and 5 USDT minimum notional for those rows. Confirm the current fields, then look at the book: how wide is the bid-ask gap as a fraction of price, and how much size rests within a few ticks of the top?

   A bad answer: assuming the microcaps and narrow thematic ETFs behave like SPYUSDT because their spec tables look identical. They do not, and the difference is paid in spread and slippage on both legs. See the four costs of a trade.

6. What is the current funding rate, and which side of it are you on?

   Funding follows the interval and cap/floor shown for the contract. Some symbols use eight hours; several moved to four hours and ±1.00% in September 2026. A 0% interest component means no fixed interest term is added; it does not reveal how many traders are long or short. Know the current rate, paying side, next time, interval and cap/floor.

   A bad answer: "It's only a few basis points." Count the actual settlements your planned hold crosses and test a range of historical rates with the funding cost calculator. Read funding on equity perps.

7. Is there an earnings date before you plan to exit?

   The contract trades 24/7; the company reports whenever it likes, usually after the US close. Your perp does not pause for it. A single-name position held through a report can move violently while the underlying market is shut and the index is running on a smoothed estimate rather than live prices.

   A bad answer: not knowing. Check the reporting calendar for the underlying before any hold longer than a day. The same applies to dividends, splits and other corporate actions, which have their own treatment on these contracts — see dividends, splits and corporate actions.

8. Is the US market open right now, and if not, which index mode is live?

   Binance builds the price index differently depending on the session. During US regular hours it is a weighted average of constituent prices updated every second. In pre-market and after-hours it uses a fast-decay EWMA; overnight, a slow-decay one. When external data is unavailable during maintenance, holidays and weekends, current equity contracts use Orderbook EWMA mode: Binance derives the index from its own contract book's impact mid price and smooths it. The index can move while the cash market is shut.

   A bad answer: "The chart is moving, so the market must be open." The chart always moves. What changes is whether the number underneath it is observed or estimated. The session clock tells you which regime you are in; the index and mark price guide explains what each one does.

9. Are you holding through a weekend or a US holiday?

   Over a weekend the underlying has not printed a new cash-market price since Friday's close, while the index continues in Orderbook EWMA mode using Binance's own contract book. When vendor pricing returns, the index blends toward it over a transition completed within about a minute; accumulated news can still produce a sharp repricing.

   A bad answer: "I'll close it if it moves against me." You may not get the chance; the move happens in the reopening, not gradually across it. Put a number on it with the gap exposure calculator and read trading outside US market hours. Non-US contracts (the Korean and Shanghai listings) spend even more of their existence in this regime.

10. Is the underlying a leveraged ETF?

    Seven contracts on the roster track funds that are themselves 2× or 3× daily-reset products: INTWUSDT, SNXXUSDT, TMFUSDT, TBTUSDT and the SK Hynix pair among them. A 25× position in a 2× daily fund is not 25× exposure to the underlying stock, and the fund's daily reset means its value depends on the path the underlying took, not just the destination. An underlying that ends a volatile fortnight flat leaves the fund down.

    A bad answer: treating TMFUSDT as a Treasury position. It is a leveraged bet on a leveraged bet. See ETF perps and the double leverage nobody mentions.

11. Is your stop based on mark price or last price?

    These are different numbers and the difference is not cosmetic. Binance computes the standard mark price as the median of Price 1, Price 2 and Contract Price. That same median applies when the index is in Orderbook EWMA mode; only an index actually in Fixed mode triggers EWMA smoothing of the futures last price instead. Since 31 August 2026, Price 2 uses a one-minute moving-average basis. Liquidation reads from the mark price, while a stop may use a different trigger.

    A bad answer: not knowing which trigger your order uses. Check the order form's trigger setting explicitly. Binance's current TradFi FAQ gives equities a ±5% mark-to-index constraint during regular, extended and overnight sessions and ±3% on weekends and holidays. Those are not execution-price or maximum-loss limits; confirm the live symbol in the parameters panel. Details here.

12. What happens to this position if you lose internet access for six hours?

    A concrete planning scenario: a flight, a power cut, a night's sleep. In six hours the market may cross a funding settlement or session boundary and can move a long way on a 24/7 contract. If the honest answer is "I would be liquidated", the position is too large or the leverage too high, regardless of direction.

    A bad answer: "I'll be watching." Nobody watches for six hours. Set the protective orders on the exchange, where they work without you, and check the distance to your liquidation price against a realistic overnight move.

13. Have you sized from your stop, or from the leverage slider?

    These produce different positions and only one of them is a plan. Sizing from a stop starts with the amount you are willing to lose and the distance to your invalidation level, and derives the position size from those two. Sizing from the slider starts with how much leverage the interface will let you use, which is a fact about Binance's risk limits and not about your trade.

    A bad answer: "I set it to 20× because that's the max." The 5 USDT minimum notional means you can express almost any size you like, so there is no reason to round to what the slider suggests. The position size planner does the arithmetic in the correct direction.

14. Can you state, in USDT, the loss you are planning for?

    Write the stop-distance loss plus estimated round-trip fees, spread, slippage and funding, then stress a gap past the stop. Isolated collateral helps contain exposure but does not make one amount an exact maximum. With cross margin, include the wider futures balance at risk.

    A bad answer: any answer that requires a calculation you have not already done. If the figure surprises you when you work it out, the position is wrong, and the fix is to change the size before the order rather than to reinterpret the number afterwards. Add the round-trip costs from the cost framework to it; they are part of the total.

The cheapest way to learn the rest

Learn these mechanics without opening or enlarging a live position merely to test them. Inspect the order form, trigger options, current contract panel, mark/last/index values and session change in read-only mode. Use a demo only if Binance actually offers one that covers TradFi.

For costs, use the public TradFi fee table and applicable promotion terms. Reconcile existing fill and funding exports at their original precision; do not assume the history always shows two decimals. If you have no history, choose an assumed notional and funding range on paper. The four costs of a TradFi perp trade sets out the calculation.

The friction that used to prevent bad trades (share prices, minimum lot sizes, brokerage account frictions) is gone here. A 5 USDT minimum on a 25× contract means anyone can be in a leveraged position on a leveraged ETF within a minute of funding an account, at three in the morning. The instrument does not care that the barrier is low; liquidation mechanics are identical whether you put in 5 USDT or 50,000. The low barrier is only an advantage if you spend it on learning rather than on speed.