Question 1

How are futures position sizes different from spot?

Accepted Answer

In spot trading you own the asset. In futures, you hold a contract representing a specific amount of the asset. Position size in futures is measured in contracts, and each contract has a defined value. This calculator converts your dollar risk into the correct number of contracts.

Question 2

What are perpetual futures contracts?

Accepted Answer

Perpetual futures (perps) are futures contracts with no expiry date. They track the spot price via a funding rate mechanism — longs pay shorts (or vice versa) periodically to keep the futures price aligned with spot. They are the most commonly traded crypto derivatives.

Question 3

How does leverage affect futures position sizing?

Accepted Answer

Leverage allows you to control a larger position with less margin. At 10x leverage, $1,000 margin controls a $10,000 position. However, leverage does not change your risk amount — it changes how close your liquidation price is to your entry. Always set a stop loss before your liquidation price.

Question 4

What is initial margin in futures trading?

Accepted Answer

Initial margin is the minimum amount required to open a futures position. It equals Position Value ÷ Leverage. This is different from required margin for your risk calculation — you should always set a stop loss so that your maximum loss is your defined risk amount, not your entire margin.

Futures Position Size Calculator