Definition
Perpetual futures are derivative contracts with no expiration date whose price exposure tracks a referenced market through collateral, margin and funding payments.
How perpetual futures stay close to the reference price
Because the contract never expires into delivery, venues use funding payments between long and short positions to discourage the contract price from moving too far from its reference market. The formula and payment interval vary by venue.
A trader posts collateral and can choose leverage where the venue allows it. Losses reduce the available margin. If the account falls below the venue's maintenance requirement, the position can be liquidated.
Instrument identity comes first
A perpetual future can reference crypto, a stock, a commodity, an index or another price. The familiar market name does not change the instrument. A stock-named perpetual future provides derivative price exposure and does not place a tokenized share in the trader's wallet.
What it does not mean
A perpetual future is not the referenced asset. Holding a TSLA perpetual position, for example, is different from holding a tokenized equity linked to Tesla stock.
Where this term fits
Questions about perpetual futures
- Why do perpetual futures have no expiry date?
- They use recurring funding payments and venue risk controls instead of a fixed settlement date to keep the contract connected to its reference market.
- Do perpetual futures provide ownership of the referenced asset?
- No. They are derivative contracts that provide price exposure. They do not provide shares, voting rights or ownership of the referenced asset.
- Can a perpetual futures position be liquidated?
- Yes. If losses reduce margin below the venue's maintenance requirement, the venue can close some or all of the position.
See these concepts in context
Review the Fensory MCP connection, tools and account controls.