Perpetual Futures

Perpetual futures are derivative contracts that allow traders to gain exposure to changes in an underlying asset price without a fixed expiration date.

A traditional futures contract has an expiration or settlement date. A perpetual contract can remain open indefinitely as long as the trader maintains sufficient collateral and follows the platform’s requirements.

Funding rate

Perpetual contracts use a funding rate mechanism to help keep the contract price close to the spot price. Periodic payments between market participants depend on the relationship between the contract price and the spot reference.

Depending on the funding rate, one side of the market pays the other. Funding is therefore a balancing mechanism rather than a standard trading fee.

Margin and liquidation

Perpetual futures generally support leverage. When the market moves against a position, its collateral decreases, and reaching the required threshold can trigger liquidation.