How USDT-margined perpetual futures work on Binance and similar venues: margin modes, leverage, liquidation, mark price and funding, with worked examples.
Exchange Guides · Updated 2026-10-09
A perpetual future is a contract that tracks the price of an asset such as bitcoin but has no expiry date. In a USDT-margined (also called linear) perpetual, you post collateral in USDT, profit and loss is settled in USDT, and position size is quoted in the coin. A long position of 0.1 BTC gains 0.1 USDT for every 1 USDT rise in the price and loses the same amount for every 1 USDT fall. This guide describes the general mechanics that Binance and similar venues use. Exact rules, tiers and limits differ by venue, by contract and by country, and futures may not be available to you at all where you live, so read the exchange's own documentation before trading.
This guide is not a recommendation to open a futures account.
Leverage sets how much collateral you must post to open a position: initial margin = position value ÷ leverage. A 6,000 USDT position at 10x needs 600 USDT of initial margin; at 5x it needs 1,200 USDT. Leverage does not change how much you gain or lose per dollar of price movement for a given position size. It changes how much of your own money sits behind the position, and therefore how small a move is enough to wipe that money out.
Maintenance margin is the minimum equity the exchange requires to keep a position open, expressed as a maintenance margin rate (MMR) multiplied by the position value. Exchanges usually publish MMR in tiers that rise as positions get larger, sometimes with a fixed deduction called the maintenance amount. When your margin plus unrealized profit and loss falls to the maintenance level, the position is liquidated: the exchange closes it, and the margin behind it is largely or entirely gone.
In isolated margin, each position has its own margin. If it is liquidated, you lose that margin and nothing else. In cross margin, the whole futures wallet balance backs every open position. A losing position can draw on the entire balance before it is liquidated, which pushes the liquidation price further away but puts the whole balance at risk at once. Profits on one cross position also support the others, which can hide how much total risk you are carrying.
For a beginner, isolated margin makes the maximum loss of each trade explicit. Cross margin is not wrong, but it requires watching total account exposure rather than one position at a time.
Liquidations are triggered by the mark price, not the last traded price. The mark price is a fair-value estimate built from spot index prices on several venues plus a basis component, designed so that a brief spike on one order book does not liquidate everyone. Your unrealized profit and loss for margin purposes is measured at the mark price.
Our liquidation price calculator uses the published maintenance-margin formula: liquidation price = (margin + maintenance amount − side × qty × entry) ÷ (qty × MMR − side × qty), where side is +1 for a long and −1 for a short. Take its example: a long of 0.1 BTC at 60,000, 10x isolated, MMR 0.5% and a maintenance amount of 0. The position is worth 6,000 USDT, so the margin is 600 USDT. Liquidation = (600 − 6,000) ÷ (0.0005 − 0.1) = −5,400 ÷ −0.0995 ≈ 54,271.36. A drop of about 9.5% removes the position.
A short with the same settings liquidates at (600 + 6,000) ÷ (0.0005 + 0.1) = 6,600 ÷ 0.1005 ≈ 65,671.64. In cross margin with a 2,000 USDT wallet, the same long liquidates at (2,000 − 6,000) ÷ −0.0995 ≈ 40,201.01: further away, but the whole 2,000 USDT is now at stake. The calculator leaves out fees and funding, so the real liquidation price is slightly closer to entry.
The position size calculator turns a stop-loss into a size. Its example is a 10,000 USDT account risking 1%, a long entry at 60,000, a stop at 58,800 and a 0.05% fee per side. Risk amount = 10,000 × 1% = 100 USDT. Loss per BTC = (60,000 − 58,800) + 60,000 × 0.05% + 58,800 × 0.05% = 1,200 + 30 + 29.40 = 1,259.40 USDT. Quantity = 100 ÷ 1,259.40 = 0.079403 BTC. Position value = 0.079403 × 60,000 ≈ 4,764.17 USDT, and at 5x the margin is 4,764.17 ÷ 5 ≈ 952.83 USDT.
Next, check that the stop sits well before the liquidation price. With isolated margin and a maintenance amount of 0, a long's liquidation price simplifies to entry × (1 − 1 ÷ leverage) ÷ (1 − MMR). At 5x and an MMR of 0.5%, that is 60,000 × 0.8 ÷ 0.995 ≈ 48,241.21, far below the 58,800 stop. If the stop were below the liquidation price, the exchange would close the position before your plan did.
Because a perpetual never expires, exchanges use funding payments to keep its price close to spot. At each settlement, if the funding rate is positive, longs pay shorts; if it is negative, shorts pay longs. Each payment is position value × funding rate, exchanged between traders rather than paid to the exchange. Funding is charged on the full position value, not on the margin, so leverage magnifies its effect relative to your capital.
Our recorded data for the BTCUSDT perpetual on Binance, as of 7 October 2026 00:02 UTC, shows settlements every 8 hours. Over the 30 days to that date there were 90 settlements, and their rates summed to 0.411137%. A 10,000 USDT long held for the whole window, with its notional kept at 10,000 USDT, would have paid about 10,000 × 0.411137% ≈ 41.11 USDT. The average rate per settlement was about 0.004568%, which annualizes to 0.004568% × 3 × 365 ≈ 5.00%, and 90% of those settlements were positive. If the position used 5x leverage, its margin was 2,000 USDT, so funding alone cost about 2.06% of the margin in one month.
Rates change at every settlement. The latest Binance BTC rate in the same snapshot was −0.000743%, meaning shorts paid longs at that settlement, and the lowest over 90 days was −0.002585%. Use the funding fee calculator with the current rate rather than relying on these historical numbers.
Beginners most often choose leverage first and size second, which turns the liquidation price into their real stop. Other common mistakes are using cross margin without realizing that the whole balance is exposed, watching the last price instead of the mark price, ignoring funding on positions held for days or weeks, adding margin to a losing position just to avoid liquidation, and assuming that the size or exposure of a public bot or league entry is suitable for their own account. Bot results on this site are paper-traded and are context, not instructions to copy.
Leveraged derivatives can lose all the margin committed to them quickly, and in fast markets fills can be worse than expected. Futures are restricted or unavailable in many jurisdictions, so check the exchange's terms for your country. This guide explains mechanics only and is not investment advice. If you are still learning, practising with paper trading or very small size costs far less than learning through a liquidation.
Educational content, not investment advice. Guide content and league rankings are independent of any exchange or sponsor relationship.