Perpetual Futures
Perpetual futures are futures-style contracts with no expiry date, mainly traded on crypto exchanges. Instead of converging with the spot price at maturity, their price is held near spot by periodic funding payments between holders of long and short positions.
Also called: perpetual swap · perps · perpetual contract · perpetual futures contract
An ordinary futures contract meets the spot price on its expiry date, which keeps the two connected. A perpetual has no expiry, so the exchange uses a funding mechanism instead. At set intervals, often several times a day, holders on one side pay holders on the other. When the perpetual trades above the spot index, longs pay shorts, which rewards selling and pulls the price down; when it trades below, shorts pay longs.
Perpetuals are usually traded with high leverage against collateral, commonly a stablecoin or the crypto asset itself. If a position's margin falls below the maintenance level, the exchange's systems close it automatically rather than issuing a margin call and waiting. When many leveraged positions point the same way, forced closures move the price, which pushes more positions below maintenance: a liquidation cascade that can move a market sharply within minutes.
Most perpetual trading has taken place on exchanges outside US derivatives regulation. On 29 May 2026 the CFTC approved a bitcoin perpetual contract for listing on a registered US exchange and issued a policy statement on how it will review further perpetual contracts. For a payments or treasury team, funding rates are a useful gauge of crypto leverage and of demand for stablecoin liquidity, and a reminder that a position with no expiry still settles cash continuously.
In practice
Funding rates can swing sharply and turn a profitable position into a costly one. Retail access to crypto derivatives is restricted or prohibited in several jurisdictions, so check the rules where the customer is based.
Example
A trader holds a US$100,000 long perpetual position. If funding is set at 0.01 percent per interval and the perpetual trades above spot, the trader pays US$10 at each interval to holders of short positions, on top of any gain or loss on the price.
Learn more on Money Wiki
This page gives the short answer. Money Wiki has a longer guide to Perpetual Futures, with more detail and background.
Commonly confused with
| Term | How it differs |
|---|---|
| Futures contract | A dated futures contract converges with spot at expiry. A perpetual never expires and relies on funding payments to stay near spot. |
See also
- Futures ContractA futures contract is a standardised, exchange-traded agreement to buy or sell an asset at a price fixed today, for delivery or cash settlement on a set future date. A clearing house stands between the two sides and collects margin.
- Margin CallA margin call is a demand that a party to a leveraged position or derivative post more collateral, usually cash, because the position has moved against it or the required margin has risen. If the call is not met, the counterparty can close the position.
- Spot RateThe spot rate is the price for exchanging one currency for another for near-immediate settlement. "Immediate" is a convention rather than a fact: standard spot settlement in most currency pairs is two business days after the trade.
- StablecoinA stablecoin is a crypto-asset designed to hold a steady value against a reference, almost always a fiat currency such as the US dollar. How that steadiness is supported differs sharply from one issuer to the next, and so does what a holder can actually redeem.
- DerivativeA derivative is a contract whose value comes from the price, rate or event it references, called the underlying. It lets parties take on or shed exposure to that underlying without buying or selling the underlying itself.