Perpetual Futures
A leveraged derivative contract that tracks an asset’s price with no expiration date.
Also called: perps · perpetual swap · perp
In plain language
Perpetuals behave like futures but never settle. They stay tethered to the spot price through a periodic funding payment between longs and shorts.
They offer high leverage — often up to 100x — which is the core reason they dominate crypto trading volume and the core reason accounts are destroyed on them.
Because there is no expiry, a position can be held indefinitely, accruing funding costs the whole time.
Why it matters
Perpetuals make it trivially easy to open a position far larger than your account. The position size math matters more here than in any other instrument.
Common mistakes
- Choosing leverage first and discovering the liquidation price afterward.
- Holding a perpetual for weeks without accounting for accumulated funding.
- Treating maximum available leverage as a recommendation.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A recurring payment between long and short holders that keeps a perpetual near spot price.
The price at which a leveraged position is forcibly closed because margin is exhausted.
Using borrowed capital to control a position larger than your account balance.
The capital your broker requires you to post to open and hold a leveraged position.
A market where assets are bought and sold for immediate delivery and full ownership.