Understanding perp trading in Phantom
Perpetual futures, also called perps, let you trade the price movement of assets such as crypto, commodities, stocks, and indices without owning the underlying asset.
Perps in Phantom are powered by Hyperliquid. You can trade them in the Phantom mobile app and in Phantom Terminal. Positions, balances, and order history automatically appear on both when you’re signed in to the same Phantom account.
How perp trading works #
When you open a position, you enter a contract with another trader who takes the opposite side. One trader goes long and the other goes short.
You never own the underlying asset. Instead, your profit or loss is settled in USDC based on how the asset’s price changes.
Perps balance #
Your perps balance is held on Hyperliquid and is tied to the Ethereum address in your Phantom account. It is denominated in USDC and is used to open and manage positions.
You don’t need to fund your perps balance in advance. Phantom can open a position directly using SOL, another supported token on Solana, or your Cash account. Phantom converts those funds into USDC and commits them as margin when you place the trade.
When you close a position, funds return to your perps balance. They stay there until you open another position or withdraw them back to your wallet.
If you’ve previously traded on Hyperliquid, your existing balances and positions automatically appear in Phantom.
For instructions, see:
Network fees #
Although your perps balance is denominated in USDC on Hyperliquid, your funds begin and end in your Phantom wallet.
Whenever funds move between Phantom and Hyperliquid, the transfer happens as an onchain transaction, so you’ll need a small amount of the network’s native token (such as SOL) to pay network fees.
Funding and withdrawals also convert between your chosen asset and USDC, so the amount received is slightly less than the amount transferred.
Long vs short #
Choose a direction based on how you expect the market to move.
- Long: You profit if the price rises.
- Short: You profit if the price falls.
Market and limit orders #
Phantom supports two order types.
- Market order: Executes immediately at the current market price.
- Limit order: Executes only if the market reaches the price you specify. For long positions, the limit price must be higher the current price of the contract. For short positions, the limit price must be higher than the current price of the contract.
Limit orders are currently available only in the Phantom mobile app.
Leverage and margin #
Margin is the USDC you commit as collateral.
Leverage multiplies your market exposure, allowing you to control a larger position with less capital.
For example:
- Margin: 100 USDC
- Leverage: 5×
- Position size: 500 USDC
If the market rises 1%, your gain is approximately 5 USDC before fees and funding.
If the market falls far enough against your position, it may be liquidated.
Phantom uses isolated margin, meaning only the funds committed to that position are at risk.
Maximum leverage varies by market. Equity perps generally support lower leverage than crypto perps.
Liquidation #
Liquidation happens when your remaining margin can no longer cover potential losses.
The position is automatically closed to limit losses to the collateral committed to that position.
Higher leverage brings the liquidation price closer to your entry price.
Funding rate #
The funding rate helps keep perp prices aligned with spot prices.
It is a small hourly payment exchanged between traders.
- Positive funding rate: Long positions pay short positions.
- Negative funding rate: Short positions pay long positions.
Funding payments are reflected directly in your P&L rather than appearing as separate transactions.
Take-profit and stop-loss #
Take-profit (TP) and stop-loss (SL) orders automatically close your position when a price you choose is reached.
- Take-profit: Locks in gains.
- Stop-loss: Limits losses.
When either trigger executes, funds return to your perps balance.
Position metrics #
These terms appear when viewing an open position.
| Metric | Description |
|---|---|
| P&L | Profit and loss in USDC |
| ROI | Profit and loss as a percentage of margin |
| Size | Total position value, based on margin and leverage |
| Margin (Isolated) | USDC collateral backing this position |
| Direction | Long or short, with leverage |
| Entry Price | Price when opened, or average price if you added to the position |
| Liquidation Price | Price at which the position can automatically close |
| Funding | Current hourly funding rate |
| Funding Payments | Total funding paid or received |
Equity perps #
Equity perps track the price of traditional assets such as stocks, commodities, and market indices without giving ownership of the underlying asset.
They are deployed by trade.xyz. Phantom does not issue or manage these contracts.
Pricing differs depending on whether traditional markets are open.
During market hours, prices follow live market data.
Outside market hours, prices reflect expected movement and may differ from exchange prices.
See Equity perp FAQ.
Risks #
Before trading perps, understand these key risks.
Price volatility #
Leverage amplifies both gains and losses.
Consider using lower leverage and a stop-loss.
Liquidation #
Higher leverage increases liquidation risk.
Monitor your liquidation price and add margin if needed.
Funding rates #
Funding payments occur hourly and can accumulate over time.
Monitor current rates if you plan to hold positions for longer periods.
After-hours pricing #
Equity perps may trade differently from traditional exchanges outside market hours.
Be aware of this when opening or holding positions.