Perpetual Futures

Perpetual futures, often shortened to perps, are derivative contracts that track the price of a crypto asset without ever expiring. Unlike traditional futures with a settlement date, a perp can be held indefinitely, so exchanges use a periodic funding payment between long and short holders to keep the contract price anchored to the underlying spot market. Perps are usually traded with margin and leverage, which magnifies both gains and losses and exposes the position to forced liquidation if margin runs short. They are among the most heavily traded crypto instruments, but the combination of leverage, funding costs and volatility makes them substantially riskier than spot buying.