How to trade crypto perpetual futures on Robinhood (EU)

Perpetual futures represent a sophisticated financial instrument that tracks cryptocurrency prices without requiring you to own the underlying assets. Robinhood (EU) offers this advanced trading tool for experienced traders who want exposure to Bitcoin and Ethereum price movements with enhanced flexibility and leverage options.

What are perpetual futures

Perpetual futures are derivative contracts that mirror the price movements of cryptocurrencies like Bitcoin and Ethereum. Unlike traditional futures contracts, perpetual futures never expire—you can hold your position indefinitely as long as you maintain sufficient margin.

When you trade a perpetual future, you're not buying or selling actual cryptocurrency. Instead, you're entering a contract that gains or loses value based on the underlying crypto's price movements. This arrangement gives you market exposure without the complexities of wallet management or direct ownership.

The "perpetual" aspect means you never face contract expiration dates or rollover requirements. Traditional futures force you to either close positions or roll them to new contracts before expiry. Perpetual futures eliminate this hassle entirely.

How perpetual futures work on Robinhood

Robinhood's perpetual futures system operates through regular settlement cycles that occur every 15 minutes. During each settlement, the platform calculates your profits, losses, and any applicable fees. This frequent settlement keeps your account balanced and prevents the accumulation of large unrealized gains or losses.

The platform offers two primary cryptocurrencies for perpetual trading: Bitcoin (BTC-PERP) and Ethereum (ETH-PERP). Both contracts settle in USD and accept EUR or USD as collateral for your margin requirements.

Funding rates play a crucial role in perpetual futures. These periodic payments between long and short traders help keep the contract price aligned with the underlying cryptocurrency's spot price. If you hold a long position and the funding rate is positive, you pay short position holders. If the rate is negative, you receive payments from them. Funding occurs every eight hours at predetermined times.

Going long and short

Going long means you expect the cryptocurrency price to rise. When you open a long position on Bitcoin perpetual futures, you profit if Bitcoin's price increases. Your gains multiply based on your leverage amount—a 10% Bitcoin price increase with 2x leverage results in roughly 20% returns on your margin.

Going short positions you to profit from falling prices. Short selling in traditional crypto markets requires borrowing assets and complex procedures. Perpetual futures simplify this process—you simply select "sell" to open a short position. If Bitcoin's price falls 15% and you're using 3x leverage, your position gains approximately 45%.

This bidirectional capability lets you implement sophisticated trading strategies. You can hedge your existing cryptocurrency holdings by opening short perpetual positions, potentially offsetting losses in your spot holdings during market downturns.

Understanding leverage

Leverage amplifies both your potential profits and losses by letting you control larger positions with less capital upfront. Robinhood offers up to 3x leverage on perpetual futures, meaning you can open a €15,000 position with just €5,000 in margin.

The mathematics of leverage are straightforward but critical to understand. With 2x leverage, a 5% price movement in your favor generates roughly 10% returns on your margin. However, a 5% adverse price movement creates approximately 10% losses. This amplification effect accelerates both winning and losing trades.

Leverage also affects your margin requirements and liquidation risk. Higher leverage means lower margin buffers and faster approaches to liquidation levels when trades move against you.

Margin requirements and liquidation

Margin serves as your collateral for leveraged positions. Robinhood requires three types of margin levels, each serving different risk management purposes.

Initial margin represents the minimum collateral needed to open a position—currently set at 20% of your position's notional value. If you want to open a €10,000 Bitcoin position, you need at least €2,000 in available margin.

Maintenance margin is the minimum amount required to keep your position open, calculated as 10% of your position's notional value. If your margin falls below this threshold due to adverse price movements, Robinhood may partially liquidate your position.

Close-out margin triggers full liquidation at 5% of your position's notional value. This final safety measure protects both you and the platform from excessive losses.

Liquidation occurs automatically when your margin falls below required levels. Partial liquidation reduces your position size to restore healthy margin ratios. Full liquidation closes your entire position. Both scenarios incur additional fees—partial liquidation costs 0.05% of the liquidated amount, while full liquidation charges 1% of the total position value.

Getting started with eligibility

Trading perpetual futures on Robinhood requires completing an appropriateness assessment that evaluates your financial background and trading knowledge. This assessment covers your investing experience, income levels, investment objectives, and understanding of leverage risks.

The assessment protects both you and Robinhood by ensuring perpetual futures align with your financial situation and experience level. If you don't pass initially, the platform provides educational materials and allows retakes after cooldown periods.

Cooldown periods increase with each failed attempt: 24 hours after the first failure, 48 hours after the second, and 72 hours after the third. After three failed attempts, you must wait two weeks from your initial attempt before restarting the process.

During cooldown periods, you're required to study educational materials about perpetual futures. This waiting period isn't punitive—it's designed to help you gain the knowledge needed to trade these complex instruments safely.

Placing your first trade

The trading process begins with selecting your market direction. Navigate to the perpetual futures section through the Portfolio, Explore, or dedicated Perpetuals pages in the app. Choose the cryptocurrency you want to trade and select either "Long" for rising prices or "Short" for falling prices.

Next, configure your order parameters. Choose between market orders for immediate execution or limit orders for specific price levels. Enter your position size either in cryptocurrency quantity or USD notional value. Select your leverage level up to 3x and choose between isolated or cross margin modes.

Isolated margin mode restricts each position's risk to its specific margin allocation. Cross margin mode pools margin across all your perpetual positions, potentially providing more flexibility but also creating interconnected liquidation risks.

Consider adding take profit and stop loss orders during position entry. Take profit orders automatically close profitable positions at predetermined levels, while stop loss orders limit potential losses. These tools help manage risk even when you're not actively monitoring the market.

Risk management tools

Take profit orders lock in gains when prices reach favorable levels. If you're long Bitcoin at €50,000 and set a take profit at €55,000, the system automatically closes your position if Bitcoin reaches that price. This automation prevents emotional decision-making during volatile periods.

Stop loss orders provide downside protection by closing positions when prices move against you. Setting a stop loss at €47,000 on your €50,000 Bitcoin long position limits potential losses to roughly €3,000 plus leverage effects.

Both order types trigger based on mark price rather than last traded price. Mark price provides a more stable reference point that's less susceptible to temporary market manipulation or liquidity issues.

Position health indicators help you monitor liquidation risk in real-time. Green indicators suggest healthy positions well away from liquidation levels. Yellow warnings indicate approaching risk zones where you should consider adding margin or reducing position size. Red alerts signal imminent liquidation danger requiring immediate action.

Understanding costs and fees

Trading perpetual futures involves several fee components that affect your overall returns. Venue fees cover the cost of trade execution through Robinhood's partner exchange, while Robinhood's own fees provide platform access and services.

Funding payments occur every eight hours and can either cost you money or generate income. The direction and magnitude of these payments depend on market conditions and which side of the trade you're on. Long positions typically pay funding when demand for leverage is high, while short positions might pay during bearish market conditions.

Settlement happens every 15 minutes and includes fee calculations along with profit and loss adjustments. This frequent settlement prevents large imbalances from accumulating and keeps your account status current.

Liquidation fees represent the most expensive potential cost. Partial liquidations cost 0.05% of the liquidated notional value, while full liquidations charge 1% of your total position size. These fees make position monitoring and risk management crucial for cost-effective trading.

Tax considerations

Perpetual futures trading creates tax obligations that vary based on your jurisdiction and trading frequency. Each time you close a position, you realize either a gain or loss that may be subject to taxation according to local laws.

Robinhood provides account statements and transaction histories to help with tax reporting, but doesn't offer tax advice or file returns on your behalf. The platform tracks your trade history and calculates realized profits and losses, giving you the raw data needed for tax preparation.

The 15-minute settlement cycles mean your tax situation updates frequently. Even though settlements occur regularly, only closed positions generate realized gains or losses for tax purposes. Open positions with unrealized profits or losses don't typically create immediate tax obligations.

Consider consulting with a tax professional familiar with cryptocurrency derivatives in your jurisdiction. The complexity of perpetual futures taxation often exceeds what general tax software can handle properly.

Advanced considerations

Cross margin versus isolated margin represents your biggest strategic decision when trading multiple perpetual

FAQs

What are crypto perpetual futures?

Perpetual futures are derivative contracts that mirror cryptocurrency price movements without expiration dates. Unlike traditional futures, you can hold positions indefinitely while maintaining sufficient margin, and you don't need to own the underlying cryptocurrency.

How do I trade perpetual futures on Robinhood?

Navigate to the perpetual futures section through Portfolio, Explore, or Perpetuals pages. Select your cryptocurrency (Bitcoin or Ethereum), choose long or short position, set your order parameters including leverage, and configure take profit/stop loss orders if desired.

What cryptocurrencies can I trade with perpetual futures on Robinhood?

Robinhood offers perpetual futures trading for Bitcoin (BTC-PERP) and Ethereum (ETH-PERP), with settlements in USD and accepting EUR or USD as collateral.

What is the maximum leverage available?

Robinhood offers up to 3x leverage on perpetual futures trading, meaning you can control €15,000 worth of position with €5,000 in margin.

What are the margin requirements?

There are three margin levels: Initial margin (20% of position value), maintenance margin (10%), and close-out margin (5%). Falling below these thresholds can trigger partial or full liquidation.

How do take profit and stop loss orders work?

Take profit orders automatically close positions at predetermined profit levels, while stop loss orders limit potential losses. Both trigger based on mark price rather than last traded price.

What happens during the onboarding process?

You must complete an appropriateness assessment evaluating your financial background and trading knowledge. Failed attempts have increasing cooldown periods and require studying educational materials.

What are the costs and fees involved?

Costs include venue fees, Robinhood platform fees, funding payments (every 8 hours), and potential liquidation fees (0.05% for partial, 1% for full liquidation).

How can I monitor my position health?

Position health indicators show real-time liquidation risk using color coding: green for healthy positions, yellow for approaching risk zones, and red for imminent liquidation danger.

Can I go long and short on perpetual futures?

Yes, you can go both long (profit from price increases) and short (profit from price decreases) on perpetual futures through Robinhood.

How often do settlements occur?

Settlements happen every 15 minutes, calculating profits, losses, and applicable fees to keep your account balanced.

What are the tax implications?

Trading perpetual futures creates taxable events when positions are closed. Robinhood provides transaction histories but doesn't offer tax advice. Consult a tax professional familiar with crypto derivatives.

How can I manage risk when trading perpetual futures?

Use tools like stop loss orders, take profit orders, position size management, and careful leverage selection. Monitor position health indicators and maintain adequate margin levels.

What happens if I fall below margin requirements?

If your margin falls below required levels, Robinhood may initiate partial liquidation (reducing position size) or full liquidation (closing entire position), both incurring additional fees.

Can I trade perpetual futures 24/7?

Yes, perpetual futures markets operate continuously, allowing you to trade at any time, with settlements occurring every 15 minutes.