Crypto Investing — Advanced: Derivatives: Futures, Perps & Options

Futures are agreements to buy/sell later at a set price. Crypto's perpetual futures ('perps') have no expiry and use a funding rate to tether their price to spot. Options grant the right (not obligation) to buy (call) or sell (put) at a strike price.

Derivatives enable hedging and leverage. Leverage magnifies both gains and losses and can trigger liquidation, where your position is force-closed. Most retail losses come from over-leverage, not from being wrong about direction.

Key takeaways

• Perps use funding rates to track spot; options price optionality.
• Leverage magnifies outcomes and introduces liquidation risk.
• Risk control matters more than directional accuracy.

Educational disclaimer: This material is provided by Nieto Engineering Inc. for internal education only. It is not investment, financial, legal, or tax advice and is not a recommendation to buy, sell, or hold any asset. Cryptocurrency, equities, and prediction markets carry substantial risk, including total loss of capital. Past performance does not indicate future results. Always do your own research and consult a licensed professional before investing.