A derivative is a contract that allows the buyer or seller to trade on the value of the underlying asset, but not actually have to own this asset.

A future can be fixed maturity, meaning that it expires and settles on a fixed date, or it can be perpetual,meaning that it has no expiration date and settles on a continuous basis.

Leverage means that the trader puts down a smaller amount of funds to trade a larger position. The leveraged amount will be borrowed from Kraken. As the position size is larger than the initial investment, both gains and losses will be amplified, even from small price movements in the underlying asset.form

There are two different types of options. Call Options allow the purchaser to buy an asset at a specific price, known as the “strike price.” Put Options allow the purchaser to sell an asset at the strike price.