> For the complete documentation index, see [llms.txt](https://docs.trade.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.trade.xyz/legal-and-disclaimers/perpetuals-risks-and-disclaimers.md). # Perpetuals Risks and Disclaimers Risks related to trading perpetual contracts. Perpetual contracts are leveraged derivatives and involve a substantial risk of loss. You may lose all margin allocated to a position. Cross-margin positions can place additional account collateral at risk. You should trade only if you understand the applicable contract specification, pricing methodology, margin mode, liquidation mechanics, and funding terms. Perpetual contracts provide synthetic price exposure. They do not give holders ownership of, or any voting, dividend, distribution, information, redemption, conversion, delivery, or other rights in, an underlying asset or issuer. Below is a non-exhaustive list of disclosures, disclaimers, and risks to be aware of related to perpetual markets. ## Leverage, liquidation, and auto-deleveraging * Leverage magnifies gains and losses. A relatively small movement in the mark price can exhaust posted margin or materially impair an account. If account equity falls below the applicable maintenance requirement, positions may be liquidated without prior notice. * Liquidations use the mark price, which may differ materially from the last trade, an executable order-book price, the oracle price, or a price displayed by another venue. A displayed liquidation price is an estimate and may change because of funding payments, market liquidity, margin tiers, or changes in unrealized profit and loss on other cross-margin positions. A stop-loss or other conditional order may not execute before liquidation, including when its trigger and the liquidation threshold are crossed during the same or successive price updates. * Market liquidation orders may execute only partially or at unfavorable prices. If ordinary liquidation is insufficient, a backstop liquidation may transfer positions and margin to a liquidator. If an account becomes negative and other liquidation mechanisms are insufficient, auto-deleveraging may forcibly reduce or close profitable positions on the opposite side of the market. Expected profits are therefore not guaranteed even when a participant correctly anticipated the direction of the market. * Under cross margin, losses and margin requirements for one position can reduce the collateral supporting other positions. This can cause positions that would not be liquidatable in isolation to be liquidated. ## Prices are not representations of fair value * Prices used or displayed in connection with `xyz` markets are reference values generated under specified methodologies. trade\[XYZ] does not represent or warrant that an oracle price, external price, mark price, last-traded price, chart price, liquidation price, or other displayed value is accurate, complete, current, economically appropriate, or reflective of fair value. A displayed or calculated price is not a representation that an underlying asset, perpetual contract, or position could be purchased, sold, or closed at that price. * Different markets, venues, data providers, and participants may report or reasonably assign different values to the same referenced asset. An `xyz` price may differ materially from a price available elsewhere or from a participant’s assessment of fair value. These differences can affect funding, unrealized profit and loss, margin requirements, order triggers, and liquidation. ## External reference-data and transformation risk * `xyz` markets incorporate data from external markets, trading venues, data providers, market calendars, transformation logic, relayer infrastructure, and onchain oracle updates. Data or an update may be unavailable, delayed, stale, incomplete, inaccurate, incorrectly mapped, disrupted, or manipulated. * A source value may be genuinely published by the relevant source and still be erroneous or economically unrepresentative. For example, a source may reflect an erroneous order or trade, a small transaction during a thin or extended-hours session, manipulative activity, a venue-specific dislocation, a reopening auction, a trading halt, a crossed or abnormal market, a stale quotation, or delayed treatment of a corporate action. An authentic source-market print is not necessarily fair value but may nonetheless be incorporated into a market. * Anomalies may also arise from source selection, aggregation, filtering, symbol or contract mapping, units, currency conversion, futures rolls, corporate-action adjustments, session calendars, data transmission, or relayer logic. Controls intended to filter, clamp, aggregate, or validate inputs reduce certain risks but cannot identify every anomalous value or guarantee an accurate result. * Because the oracle price is an input into more than one component of the `xyz` mark-price methodology, median construction does not guarantee that an erroneous or anomalous oracle input will be isolated. A source anomaly can affect the mark price and cause funding payments, order triggers, margin changes, or liquidation even when no trade occurs at that price on the `xyz` order book. A subsequent correction or price reversion may not reverse actions already taken. ## External-market closures and internal pricing * Trading on `xyz` may continue while a referenced external market is closed or unavailable. During those periods, the oracle may evolve using internal market information. The oracle and mark price may therefore be influenced more heavily by `xyz` order-book depth, impact prices, liquidity, and trading activity. * Internal liquidity may be thinner or more one-sided than liquidity in the underlying reference market. A relatively small order, quotation, or change in order-book depth may have a greater effect during these periods. The resulting oracle, mark price, and perpetual market price may diverge materially from the last external price or from perceived fair value and may trigger funding payments, conditional orders, margin changes, or liquidation. * When external pricing resumes after an internal pricing session, the oracle may transition back toward externally derived pricing. A gap, reopening auction, corrected value, or material difference between internal and external prices can produce rapid or sequential price movements. A limit on the size of an individual price update does not guarantee that cumulative movements will be small or that liquidation will be avoided. ## Discovery-bound risk * Discovery bounds constrain the range of permitted price discovery at a particular time. They are market-structure controls, not guarantees against loss or liquidation. Bounds may re-anchor, reset, or expand as the oracle moves or external pricing resumes. * A liquidation price outside the active bounds at one moment may later fall within the permitted range. Participants should consider the full range through which the bounds may move rather than treating the currently displayed range as permanent protection. ## Liquidity and market-hours risk * Liquidity can be limited, especially outside the main session of a referenced market or during volatile conditions. Bid-ask spreads may widen, available depth may disappear, and orders may be partially filled, filled at an unfavorable price, or remain unfilled. A market, limit, stop, take-profit, or liquidation order is not guaranteed to execute at its displayed, trigger, or expected price. * External-market closures, holidays, halts, outages, price limits, opening or closing auctions, and discovery-bound resets can produce gaps, discontinuities, or delayed convergence. The ability to trade a perpetual continuously does not mean that the referenced asset has a continuous, liquid, or observable external market. * Open-interest caps and other controls may prevent new positions or make a market reduce-only. They may also concentrate participants seeking to exit at the same time. The ability to open a position does not guarantee that comparable liquidity will be available when the position is closed. ## Corporate actions and specification risk * Stock splits, dividends, mergers, acquisitions, spin-offs, tender offers, delistings, index changes, futures rolls, contract expirations, trading suspensions, insolvencies, and other events may require an adjustment, substitution, settlement, trading halt, or interpretation under the applicable market specification. Information about an event may be delayed, incomplete, disputed, or corrected after an action is taken. * Any adjustment or settlement methodology may differ from the treatment of a holder of the underlying asset and may not reproduce the economic result a participant expected. Market specifications, methodologies, and parameters should be reviewed before trading and may change in response to market or operational conditions. ## Funding and parameter risk * Funding can be positive or negative, can change rapidly, and may materially reduce returns or increase losses. A position may pay funding even when its directional thesis is correct. Funding calculations depend on oracle, impact-price, and order-book inputs that may themselves be affected by the risks described above. * Leverage limits, margin modes, open-interest limits, funding parameters, discovery bounds, sessions, fees, oracle sources, and other market parameters may change in accordance with HyperCore and deployment rules. A parameter that applied when a position was opened may not remain available for the life of the position. ## USDC settlement risk * `xyz` contracts may reference prices denominated in U.S. dollars while margin, funding, and profit and loss are maintained or settled in USDC. USDC is not the same asset as a U.S. dollar and may trade above or below one U.S. dollar, become illiquid, experience transfer or redemption restrictions, or otherwise fail to maintain its expected value. No automatic adjustment necessarily compensates for a difference between the value of USDC and the U.S. dollar. ## Technical and regulatory risk * Hyperliquid, HyperCore, wallets, interfaces, networks, bridges, relayers, APIs, software, validators, and external data providers may fail, become unavailable, operate with delay, or behave unexpectedly. An interruption can prevent a participant from opening, monitoring, modifying, or closing a position while the position remains exposed to price movements, funding, and liquidation. Blockchain transactions may be irreversible, and neither trade\[XYZ] nor another participant may be able to reverse or repair an executed transaction. * Applicable law or the regulatory characterization of a market, contract, asset, interface, or participant may change or remain uncertain. Access, trading, settlement, or the continued availability of a market may be restricted or discontinued without providing a participant with the timing or result the participant expected. These disclosures are not exhaustive. They supplement the [General Disclaimer](/legal-and-disclaimers/general-disclaimer.md), the applicable market specifications, the [Terms of Use](https://trade.xyz/terms), and any product-specific disclosures. --- # Agent Instructions This documentation is published with GitBook. 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