Perpetual futures
Perpetual futures (perps) are futures contracts with no expiry date. Their price is kept close to spot by funding, regular payments between longs and shorts.
How it works
A dated future converges with spot on expiry day. A perp never expires, so the exchange uses a funding rate instead. If the perp trades above spot, longs pay shorts, which makes holding a long more expensive. If it trades below, shorts pay longs.
Funding is charged on a schedule, often every 8 hours, more often on some venues. It is paid between traders, not to the exchange. It is based on position size, not margin, so with leverage funding has a real effect on long-held trades.
Perps are the most traded product on crypto exchanges: you can hold them as long as you like, use leverage and go short. Liquidation and unrealized profit are usually calculated from the mark price, not the last traded price.
You hold a $10,000 long BTC perp ($1,000 margin, 10x). Funding is +0.01% every 8 hours, so you pay $1 three times a day: $3 a day, about $90 a month. That is 9% of your margin even if price did not move.
A common mistake is holding a leveraged perp for weeks without watching funding. With high positive funding, a long quietly loses a slice of its margin every day. Check the rate and the next funding time, and for long holds compare the perp with spot or a quarterly future.
Questions and answers
What are perpetual futures in simple terms?
They are futures that never expire. To keep their price from drifting away from spot, traders pay each other funding at regular intervals.
What is the difference between perpetual and regular futures?
A regular future has an expiry date; a perp does not. Instead of converging at expiry, a perp relies on funding.
Who pays funding on perpetual futures?
When the rate is positive, longs pay shorts; when negative, shorts pay longs. The exchange usually does not keep it.
Related terms
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Updated: 2026-10-19