Derivatives Perpetual Futures

Perpetual futures (or perpetuals) are cryptocurrency derivative contracts that track spot prices but have no expiration date. You buy/sell 1 BTC perpetual at 10x leverage, controlling $65,500 of exposure with $6,550 of capital. Unlike quarterly futures (that expire), perpetuals stay open indefinitely. To keep the perpetual price close to spot, a funding rate is exchanged every 8 hours between longs and shorts. If perpetuals are trading above spot (demand > supply), longs pay shorts, incentivizing new shorts and discouraging new longs (price falls). This mechanism keeps perpetuals synced with spot.