perpetual futures
Cryptocurrency contracts that never expire, allowing traders to bet on price movements indefinitely.
Perpetual futures are cryptocurrency trading contracts that let investors speculate on price changes without an expiration date. Unlike traditional futures contracts that settle on a specific date, perpetual futures exist indefinitely, letting traders hold positions as long as they want. Traders use leverage to amplify their bets—borrowing money to control larger positions than they could afford outright.
These contracts exist because crypto markets operate 24/7, making traditional time-bound futures impractical. A mechanism called “funding rates” keeps perpetual futures prices aligned with the actual cryptocurrency price: traders pay each other periodic fees depending on whether they’re betting prices up or down, which naturally balances the market. When you see perpetual futures mentioned, it usually signals discussion of leverage trading risks, volatility in crypto markets, or potential liquidations when prices move sharply against traders' bets.
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Written once as a plain-English reference, not as advice. Nothing here is a recommendation to buy or sell anything.