Perpetual Contract

What is a Perpetual Contract?

A perpetual contract (often called “perps”) is a derivative product that lets you speculate on cryptocurrency prices with leverage, without owning the underlying asset. Unlike traditional futures, perpetuals have no expiration date—you can hold positions indefinitely.

How Perpetuals Work

1. Open position: Long (bet price goes up) or short (bet price goes down)
2. Use leverage: Amplify exposure (1x to 125x)
3. Pay/receive funding: Every 8 hours typically
4. Close anytime: No expiration to worry about

Funding Rate Mechanism

The funding rate keeps perpetual prices close to spot prices:

• Positive rate: Longs pay shorts (perp above spot)
• Negative rate: Shorts pay longs (perp below spot)
• Frequency: Usually every 8 hours

Example

• Position: $10,000 long
• Funding rate: 0.01%
• You pay: $1 per funding period

Perpetuals vs Spot vs Futures

Feature	Spot	Futures	Perpetuals
Own asset	Yes	No	No
Expiration	None	Yes	No
Leverage	No	Yes	Yes
Funding	No	No	Yes

Trading Perpetuals

Available on:

• Binance - Up to 125x
• Bybit - Up to 100x
• OKX - Up to 125x

Start with low leverage (2-5x) to manage risk.