FOMO.FAMILY · LEVERAGE RISK
Perpetual futures on fomo: the risk before the reward
Perps are the highest-risk product fomo offers. Here is what leverage really does to your money, in plain arithmetic and in fomo’s own words.
Updated 2026-09-11 · Educational content · No broker owns this site
Quick answer. A perpetual future is a leveraged bet with no expiry. fomo’s Terms say perps can lose more than your initial margin, and positions may be liquidated automatically and without prior notice if margin requirements are not maintained. The higher the leverage, the smaller the move that wipes you out.
Perpetual futures — "perps" — are the highest-risk product fomo offers, and the newest. They went live on the platform on 11 June 2026 (fomo blog). Before you go near one, it is worth understanding exactly what you are agreeing to, because fomo’s own Terms of Service describe an outcome most beginners do not expect: losses exceeding your initial margin, including total loss of deposited funds — and positions that may be liquidated automatically and without prior notice if margin requirements are not maintained.
What is a perpetual future?
A perpetual future is a contract that lets you bet on a price going up or down using leverage, with no expiry date (that is the "perpetual" part — ordinary futures expire). You post a small amount of collateral called margin, and the position you control is a multiple of it. Ten-times ("10x") leverage means $100 of margin controls a $1,000 position. A periodic "funding rate" passes small payments between the two sides to keep the perp’s price near the thing it tracks.
Leverage is the whole point of a perp, and also the whole danger: it multiplies your gain and your loss by the same factor. On fomo, perps cover pre-IPO, equity, crypto, index and commodity markets, and are "offered and settled by independent, third-party decentralized protocols" — Hyperliquid and Trade[XYZ] — rather than by fomo itself (fomo Terms of Service §10, as of 2026-09-10). They are not available to U.S. Persons, and fomo says they may be restricted elsewhere at its discretion.
What do fomo’s own Terms say about the risk?
You do not need an outside expert to see how risky this is — fomo says it plainly in its own contract. Its risk acknowledgment for perpetual futures states they are leveraged derivative instruments that "can result in losses exceeding your initial margin, including total loss of deposited funds," and that positions "may be liquidated automatically and without prior notice" if margin requirements are not maintained (fomo Terms of Service §10, as of 2026-09-10).
Read those two phrases slowly, because together they describe the two things that catch beginners out. First, "losses exceeding your initial margin" means your initial margin is not a ceiling on your loss — the same sentence names "total loss of deposited funds" as one of the outcomes. Second, "without prior notice" means no one asks your permission and no one warns you first. This is fomo describing its own product, so there is no reason to doubt it.
How far can the price move before you are liquidated?
This is where the numbers become concrete, and the good news is that this part is not a guess — it is arithmetic that is true every time. What you cannot know is which way the price will go; what you can know, the moment you pick your leverage, is how little room you have before your margin is gone.
Worked example. Say you put up $100 of margin at 20x leverage. That controls a $2,000 position. Every 1% the price moves is 1% of $2,000 = $20 — which is 20% of your $100 margin. So a 5% move against you is a $100 loss, and $100 is your entire margin. A move most traders would call small is enough to wipe you out.
The table below runs the same simple calculation across common leverage levels, on the same $100 of margin. The last column is the adverse move that erases 100% of your margin.
| Leverage | Position on $100 margin | A 1% price move equals | Adverse move that wipes your margin |
|---|---|---|---|
| 2x | $200 | 2% of margin | 50% |
| 5x | $500 | 5% of margin | 20% |
| 10x | $1,000 | 10% of margin | 10% |
| 20x | $2,000 | 20% of margin | 5% |
| 50x | $5,000 | 50% of margin | 2% |
| 100x | $10,000 | 100% of margin | 1% |
These figures are the arithmetic floor, not a promise of safety. In the real product, trading fees and funding payments eat into your margin (see how fomo's fees work), and the protocol closes you out at a maintenance level that sits a little above zero — so liquidation usually happens slightly sooner than the move shown. The direction of the effect is always the same: the more leverage you use, the smaller the move that ends the trade.
Why "without prior notice" is the part beginners miss
On a leveraged position you do not choose when to close at a loss. When your margin can no longer cover the running loss, the protocol liquidates the position for you, automatically. There is no phone call, no email, and no pause that lets you add funds first. Because crypto markets trade 24 hours a day, a fast move can liquidate you while you are asleep, and in a market that gaps, the loss can be larger than the tidy arithmetic above.
A stop-loss order is not a rescue here either: in a sharp move the price can jump past your stop, and liquidation is automatic regardless. The safety net you might assume exists — someone to call, a chance to react — is exactly what fomo’s Terms tell you is not there. Since fomo is not registered with or licensed by any regulator, there is also no supervisor to complain to if a liquidation goes against you.
How to keep perps risk small — if you use them at all
None of this is advice to trade perps; a beginner has no obligation to use the riskiest product on a platform. But if you do, the arithmetic above points to a few plain habits that lower the odds of a total wipeout.
- Treat the whole margin as money you can lose completely. fomo’s Terms say you can lose more than it, so never post margin you need for anything else.
- Lower leverage buys you room. The table is the argument: 2x survives a 50% move, 100x dies on a 1% wobble. High leverage is a shorter fuse, not a smarter trade.
- Size each position so one liquidation does not matter. A string of small percentage losses compounds quickly; risking a large share of your funds on any single perp is how accounts go to zero.
- Do not rely on a stop-loss to save you. Liquidation is automatic and can happen in a gap, before any order you placed can fill.
- Remember the loss is permanent. Your funds sit in a wallet you alone control; see what self-custody really means for why there is no one to reverse a loss.
Perpetual futures can look like a fast way to grow a small balance. The Terms describe the other side of that speed: losses exceeding your initial margin, including total loss of deposited funds — and positions that may be liquidated automatically and without prior notice if margin requirements are not maintained. Read this site’s risk disclosure, and for the rest of the beginner guides, start at the fomo guide hub.
Frequently asked questions
What is the difference between a perpetual future and just buying a token?
Buying a token means you own it and the most you can lose is what you paid. A perpetual future is a leveraged bet with no expiry: fomo’s Terms (§10) say you can lose more than your initial margin, and that positions may be liquidated automatically and without prior notice if margin requirements are not maintained. It is a much higher-risk product.
Can I lose more than I deposit on fomo perps?
You can lose more than the margin you put up. fomo’s own Terms of Service (§10, as of 2026-09-10) state that perpetual futures can result in losses exceeding your initial margin, including total loss of deposited funds. Because §10 names total loss of deposited funds as a possible outcome, treat the whole deposit as money at risk.
What does being liquidated “without prior notice” mean?
When your margin can no longer cover the loss, the protocol closes your position automatically — no warning, no email, no chance to add funds first. In a fast or overnight move it can happen in minutes, and a stop-loss may not fill in time.
How far can the price move before I’m liquidated at 20x?
As a simple arithmetic floor, a 5% adverse move erases $100 of margin on a $2,000 position (20x). Fees and funding make real liquidation happen a little sooner. Higher leverage means an even smaller move wipes you out — 1% at 100x.
Are fomo perps available everywhere?
No. fomo’s Terms (§10) say perpetual futures are not available to U.S. Persons and may be restricted elsewhere at fomo’s discretion. Availability can change month to month, so check the app for your own region.