All terms
A leveraged derivative with no expiry, kept near spot price by funding payments.
A perpetual is a futures contract that never settles. Because it has no expiry to pull it back to the underlying price, a funding rate is paid periodically between longs and shorts to keep it close to spot.
Perps are where most leveraged crypto trading happens, and where most retail accounts are lost. Leverage multiplies both directions, and liquidation removes your collateral entirely rather than closing you at a loss you chose.
If you are new, this is the part of the market to leave alone. Nothing about spot ownership requires understanding perps, and the failure mode here is total rather than partial.
A ten times long liquidated by a ten percent move against it, with the entire margin gone.
That a perp is a way to hold a position long term. Funding is charged repeatedly, so a position held through a crowded market bleeds continuously even when price does not move. Perps are built for short holds.
Common questions
Why trade a perp instead of spot?
How does a perp track the spot price?
Where this comes up on the site
The guides that actually use this word, rather than a list of everything we have written.
Where to go next
More trading terms
Want this explained out loud?
Some of these land faster in conversation than in writing. Sessions are one to one and you can ask anything, including the things that feel too obvious to ask.