Perpetuals position explained

Important: Perpetual futures trading is high risk and only available to eligible professional investors in select locations and subject to regulatory approval. Perpetual futures are not available in Hong Kong or to Hong Kong users.

What is a perpetual position?

Positions for perpetual contracts are much like balances for assets – except that you cannot deposit or withdraw a position. The only way to “enter” a position is to trade on that contract’s market on the Bullish exchange. The only way to “close” a position is also by trading on the same market.

Each of your trading accounts can have multiple positions but each contract has at most one position in a trading account. So you might have a position in BTC/USDC PERP and another position in ETH/USDC PERP, but you cannot have two BTC/USDC PERP positions. A position can be categorized as either long (positive quantity of contracts), flat (no contracts), or short (negative contract count). Positions are tracked based on your actions (buying and selling) as well as settlement.

Position quantity

You can buy or sell any desired quantity of contracts on perpetuals trading, including fractional amounts, subject to the Margin Requirements. A positive number of contracts represents a "long" position, while a negative number represents a "short" position. Closing a position means holding zero contracts – and since positions at Bullish are always netted off this is as simple as selling your long position or buying your short position.

For example, if you buy 5 contracts, your position becomes long 5 contracts (+5). If you later sell 2 contracts, your position is reduced by 2 and becomes long 3 contracts (+3). Selling an additional 10 contracts would close your long 3 contract position and enter a new short 7 contract position (-7).

Position notional

Position notional refers to the total value of the perpetual position. It is calculated by multiplying the position quantity by the current Mark Price of the asset.

Entry price

The entry price is the average price at which you entered your perpetual position. It serves as a reference point to determine your overall profit or loss when the position is closed. The entry price also incorporates partial position closures. For example if you bought 10 contracts at price 100, then sold 5 contracts at price 101 for a partial position closure, then bought 7 more contracts at price 102, your entry price would be (((10 - 5) x 100) + (7 x 102)) / (10 - 5 + 7) = 101.1667.

Unsettled P&L

An important concept within perpetuals trading is settlement. Settlement is a regular process that adjusts your asset balances for realized perpetuals trading profits or losses, as well as for their mark-to-market profits or losses and their perpetuals funding. If a flat position (a position with zero quantity) has an unsettled profit or loss it will continue to be seen in the web application and in the API, until that profit or loss is settled.

Perpetual positions vs spot asset holdings

Perpetual positions differ from spot asset holdings in several ways:

a. Ownership: With spot asset holdings, you hold the underlying digital asset, while perpetual positions are derivatives contracts that allow you to speculate on price movements without owning the digital asset itself.

b. Leverage: Perpetual positions are leveraged products, allowing you to gain exposure to larger positions with a smaller amount of capital. Leverage amplifies both profits and losses, making perpetual trading a higher-risk activity compared to spot trading.

c. Funding: Perpetual positions may involve funding fees or payment, depending on the market conditions and the position held. Spot asset holdings do not incur any funding fees although borrowing an asset you do not own in order to sell it – the spot equivalent of shorting a perpetual – will incur interest charges.

Viewing perpetual positions and P&L

To view your perpetual positions and P&L:

From the Portfolio tab

  1. Go to the left-hand navigation and choose Portfolio.
    Portfolio in lefthand navigation.png

  2. Choose Positions.
    Positions tab in Portfolio.png

  3. You will see your perpetual positions and P&L.
    Perpetual Positions P&L.png

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