Perpetual futures in a prop challenge: leverage, funding and liquidation

Crypto prop firms mostly evaluate traders on perpetual futures, and so do we. A perpetual future is a contract that tracks the price of a coin with no expiry date. You can go long or short, and you trade it with margin instead of paying the full value. This guide covers the parts of the contract that touch the rules: prices, leverage, funding, fees and liquidation.

Which prices count

The terminal lists BTC, ETH and SOL perpetuals, quoted in USDT. Two prices matter, and they are not the same:

• Fills use the live Bybit order book. A market order walks the book level by level, as it would on the exchange, so you pay the spread and the slippage of that moment. The walk stops at 100 basis points from the best price, and any remainder is cancelled.
• Equity and breaches use the composite mark price, built from the Bybit and Hyperliquid marks, so a spike on one exchange cannot fail the account on its own.

Margin and leverage

The initial margin of a position is its notional value divided by the leverage. Leverage is capped at 5x on BTC and ETH and 3x on SOL, or the symbol's own cap if that is lower. Margin is shared across positions (cross margin): an order that adds exposure needs free margin for itself and its estimated fee, and a resting order reserves margin until it fills or is cancelled.

Leverage changes how fast the loss floors come close, not where they are. A $400 daily room on a 10K account is the same at any leverage; a larger position simply reaches it with a smaller price move.

Funding

Perpetuals stay close to the spot price through funding: at each funding time, one side pays the other a small share of the position's value. When the funding rate is positive, longs pay and shorts receive; when it is negative, the reverse. The simulation applies the rate the venue publishes, at its funding time, to every position open at that moment.

A funding payment is booked to the balance. It counts toward that day's result, so it can move your best day for the consistency rule, and it is checked against the floors like any other change to the balance. Each market page, such as BTC perpetual futures, shows the current rate and the next funding time.

Fees

Every fill pays a fee on its notional value: 0.05% when it takes liquidity (market orders, marketable limits, triggered stops) and 0.02% when a resting limit order is filled. A round trip pays twice, so short-term trading pays more of its result in fees. The position size calculator includes the taker fee on both legs.

Liquidation

An exchange liquidates a position when equity falls to the maintenance margin. The simulation has the same safety net: if equity reaches the maintenance margin of all open positions, every order is cancelled and every position is closed. With the leverage caps and loss limits above, the loss floors sit far above that level, so a breach stops the account long before liquidation would. In practice, the floors are the limit to plan for.

Data faults

When a venue stops sending prices, or the two marks disagree, the symbol is paused or set to reduce-only, and no breach is evaluated on a stale price. Market orders are also refused when the Bybit book drifts too far from the composite mark. See why a breach uses a composite mark.