What Are Perpetuals: Futures Without Expiry Dates
Last Updated: June 2, 2026
What are perpetuals? They're futures contracts that never expire. Unlike traditional futures, you can hold a perpetual position for as long as you like — no rollover dates, no settlement deadlines. This structure makes them the most liquid leveraged trading instrument in crypto. Perpetuals let you go long or short on Bitcoin, Ethereum, and hundreds of altcoins with leverage ranging from 2x to 125x, depending on the platform and asset. The contract's price tracks the spot market through a mechanism called the funding rate, a periodic payment exchanged between buyers and sellers every 8 hours. If the perpetual trades above spot, long holders pay shorts; if it trades below, shorts pay longs. This keeps the contract anchored to real-time prices without an expiration forcing convergence. Perpetuals have become the backbone of crypto derivatives, accounting for the majority of daily trading volume across centralized and decentralized exchanges. They're used by day traders, arbitrageurs, hedgers, and institutions. If you want to trade directional moves, hedge an existing portfolio, or capture funding arbitrage, perpetuals are the tool. This guide explains how they work, where funding rates come from, who uses them, and when they make sense for your strategy. By the end, you'll understand the mechanics, risks, and opportunities that make perpetuals the most traded contract type in digital assets. Whether you're looking to short altcoins or scale a leverage strategy, you'll know what to expect before you open a position. Explore crypto futures trading to see how perpetuals fit into broader strategies, or compare margin trading platforms to find the right fit for your risk profile.
Perpetual vs Traditional Futures
| Feature | Perpetual | Traditional | Outcome |
|---|---|---|---|
| Expiration | None — hold indefinitely as long as margin is maintained and funding fees are paid or received | Fixed settlement date — position closes automatically, forcing traders to roll or exit | Perpetuals avoid rollover costs and calendar risk; traditional futures require active contract management |
| Price mechanism | Funding rate every 8 hours keeps price near spot; no convergence event needed | Converges to spot at expiry through arbitrage and settlement; can trade at premium or discount mid-term | Perpetuals track spot continuously; traditional futures diverge more during high volatility or low liquidity |
| Liquidity | Highest volume in crypto — most traders prefer a single, always-open contract for each asset | Liquidity splits across monthly, quarterly contracts; less depth in farther-dated expirations | Perpetuals dominate orderbook depth and tightest spreads; easier to enter and exit large positions |
How the Funding Rate Anchors Price
The funding rate is the mechanism that keeps perpetual contract prices close to the underlying spot market without relying on expiration. Every 8 hours, a small payment is exchanged between long and short traders based on the difference between the perpetual's mark price and the index price (the weighted average of spot prices across major exchanges). If the perpetual trades above spot, the funding rate is positive, and longs pay shorts. If it trades below, the funding rate is negative, and shorts pay longs. This creates a financial incentive for traders to take the less popular side, pulling the contract price back toward equilibrium. For example, during a strong rally, demand for long positions drives the perpetual above spot, triggering a positive funding rate. Shorts receive the payment, making it profitable to bet against the crowd, which dampens the premium. The opposite happens during sell-offs. Funding rates are calculated continuously but settled every 8 hours, and the payment is deducted from or added to your margin balance automatically. Most exchanges display the current and predicted next funding rate in real time. Rates typically range from -0.01% to +0.10% per 8-hour period, but during extreme moves or one-sided sentiment, they can spike above 0.30% or even 1%, making it expensive to hold the popular side. Understanding funding is critical because it's a recurring cost or income stream that compounds over time. A position held for days or weeks can rack up significant funding fees if the rate stays elevated. Traders who ignore funding often find their profits eroded or even reversed. The system is designed to be self-correcting — high funding discourages the crowded trade and encourages the opposite, keeping perpetuals tethered to spot. You can read more about futures contract mechanisms on the U.S. Commodity Futures Trading Commission's educational resources. If you're trading funding-sensitive strategies, check out arbitrage opportunities in crypto for practical setups.
Six Reasons Traders Use Perpetuals
Perpetuals dominate crypto derivatives for good reason — they're flexible, liquid, and built for active strategies.
- Leverage You can control a large position with a fraction of the capital, amplifying both gains and risk. Leverage ranges from 2x to 125x depending on the asset and exchange.
- Shorting Perpetuals let you profit from price declines. Spot markets require holding the asset first; perpetuals let you open a short directly with margin.
- No expiration Hold positions as long as you want without worrying about rollover or settlement. This suits swing traders and multi-day strategies.
- Liquidity Perpetuals consolidate volume into a single contract per asset, so orderbooks are deeper and spreads are tighter than traditional futures or options.
- Hedging If you hold spot crypto, you can short perpetuals to lock in value during expected downturns, neutralizing directional risk while keeping custody of your coins.
- Funding arbitrage When funding rates are consistently high, traders can short the perpetual and long the spot, earning the funding payment with delta-neutral risk.
Perpetuals aren't for everyone. They demand active monitoring, especially at high leverage. A 5% adverse move on 20x leverage triggers liquidation if your margin isn't topped up. But for traders who understand position sizing and risk management, perpetuals offer unmatched flexibility. The combination of leverage, two-way markets, and continuous pricing makes them the go-to instrument for directional bets, hedges, and spread trades. If you're trading altcoins with thin spot markets, perpetuals often have better depth than the underlying asset. Learn more about managing risk in leveraged trades at Investopedia's guide to futures trading, or explore risk management strategies tailored for derivatives.
Trading Perpetuals on EveDex
EveDex offers perpetual contracts on Bitcoin, Ethereum, and 50+ altcoins with up to 100x leverage. You can choose between cross margin and isolated margin modes. Cross margin uses your entire account balance to maintain all positions, maximizing capital efficiency but exposing your full balance to liquidation risk. Isolated margin allocates a fixed amount per position, limiting each trade's downside to the margin you assign. The platform displays real-time funding rates and predicted next rates for every contract, so you can factor funding into your entry and exit decisions. Order types include market, limit, stop-loss, and trailing stop orders for flexible execution. Funding is settled every 8 hours at 00:00, 08:00, and 16:00 UTC, and payments appear in your margin balance immediately. EveDex also supports portfolio margin for advanced users, calculating risk across correlated positions to reduce total margin requirements. You'll find perpetual futures trading tools and analytics built in, including mark price vs index price divergence alerts and funding rate history charts. If you're hedging spot holdings or capturing funding, isolated margin lets you compartmentalize risk while maintaining exposure elsewhere in your portfolio.
