Perpetual futures

Perpetual futures are derivative contracts with no expiry date and no settlement — unlike quarterly futures you never have to roll a position. Instead, the contract price is kept close to the spot index by a periodic funding rate payment exchanged between longs and shorts roughly every 8 hours. When the perp trades above spot, longs pay shorts (incentivizing selling); when it trades below, shorts pay longs (incentivizing buying).

Example: you open a 10x long on BTC-PERP at $60,000. Eight hours later the funding rate is +0.01%, so you pay 0.01% of your notional to short holders. Annualized that is roughly 10.95% APR — a meaningful carry cost that a backtest must account for.

Traders favor perps for leveraged directional exposure, hedging spot holdings, and staying in a position indefinitely without rollover slippage. Because there is no delivery, PnL is settled in collateral (USD or a crypto stablecoin) each funding period.

Check the current funding environment with the funding rate calculator before sizing a position. Research output only — not investment advice.