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Perpetual Futures
Perpetual futures, commonly called perps, are derivative contracts that allow traders to speculate on the price of an underlying asset without an expiry date. Unlike traditional futures contracts, which settle or expire on a specified date, perpetual futures can remain open for as long as the trader maintains the position and meets the platform's margin requirements.
Why it matters to you
Perpetual futures allow traders to take both long and short positions and use leverage without owning the underlying asset. Because there is no expiry date, perpetual markets use mechanisms such as funding rates to help keep contract prices aligned with the underlying market. Perps can magnify both gains and losses, so understanding leverage, margin, funding and liquidation is essential before trading them.
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