← Glossary · Strategy
Futures Contract
A derivative contract tracking an asset's price — used for leverage, shorting, and hedging.
What it is
A crypto futures contract is an agreement to settle the difference between an asset's current price and its price at contract close. You never touch the underlying asset. Most crypto futures are 'perpetual' — they never expire, instead using a 'funding rate' mechanism to keep contract price aligned with spot. Futures unlock: (1) leverage (5×, 10×, 100×), (2) shorting (profit from price drops), (3) precise hedging. The risk: liquidation. A 10% adverse move on 10× leverage = 100% loss. Funding rates also bleed your position — pay every 8 hours when crowd is on your side.
Example
BTC at $76K. You open a 5× short futures position with $1,000 margin = $5,000 notional. BTC drops to $72,200 (-5%). Your P&L: +5% × 5× = +25% on margin = +$250. BTC rallies to $79,800 (+5%)? You lose $250.
How Indikora uses Futures Contract
Indikora does not support futures trading. Spot only — by design. The Coach actively warns when manual trades use leverage.
Related terms
- Spot Trading — Trading the actual asset (you own the coins) — no leverage, no liquidation, no expiry.
- Leverage — Borrowed capital that multiplies position size — and proportionally multiplies both gains and losses.
- Funding Rate — Periodic payment between long and short perpetual-futures holders that keeps contract price tied to spot.