> For the complete documentation index, see [llms.txt](https://docs.yellow.pro/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.yellow.pro/perpetual-trading/what-is-perpetual-trading.md).

# What is Perpetual Trading?

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Perpetual trading involves significant risk, including the possibility of losing more than your initial margin. Only trade with funds you can afford to lose.
{% endhint %}

Perpetual trading lets you speculate on the price of cryptocurrencies **without owning the underlying asset**. You trade a **perpetual contract** that tracks the market price of an asset like BTC or ETH. Unlike traditional futures, perpetual contracts have **no expiry date** — your position stays open until you close it or it is liquidated.

## How Perpetual Contracts Work

* **No asset ownership** — you never actually hold BTC, ETH, or any other coin.
* **Leverage** — you can control a position much larger than your deposited funds.
* **Mark Price** — positions are valued using the [Mark Price](/perpetual-trading/risk-and-liquidation/liquidation-and-mark-price.md), designed to reflect fair value and reduce manipulation.
* **Liquidation** — if the market moves against you beyond your margin buffer, your position is closed automatically.
* **Order types** — perpetual orders use the same **market, limit, and stop** types and **Time in Force** options as spot. See [Order Types](/spot-trading/order-types.md).

## Perpetual vs Spot — Key Differences

|                         | Spot                 | Perpetual            |
| ----------------------- | -------------------- | -------------------- |
| You own the asset       | Yes                  | No                   |
| Leverage                | No                   | Yes                  |
| Profit in a bear market | No (only by selling) | Yes (by going short) |
| Expiry                  | N/A                  | No expiry            |
| Liquidation risk        | None                 | Yes                  |
| Complexity              | Lower                | Higher               |

## Who Should Use Perpetual Trading?

Perpetual trading is designed for traders who want to speculate on short-term price movements, hedge existing spot positions, and are comfortable with the risks of leverage and liquidation.

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New to trading? Start with [What is Spot Trading?](/spot-trading/what-is-spot-trading.md) first.
{% endhint %}

## Related Articles

* [Order Types](/spot-trading/order-types.md)
* [Long, Short & Hedge Mode](/perpetual-trading/long-short-hedge-mode.md)
* [Margin & Leverage](/perpetual-trading/margin-and-leverage.md)
* [Risk & Liquidation](/perpetual-trading/risk-and-liquidation.md)