What Are Perpetual Contracts? The Futures That Never Expire

By: WEEX|2026/07/15 16:13:02

A perpetual contract (or "perpetual future") is a type of futures contract with no expiry date. Unlike traditional futures, which settle on a fixed calendar date, a perpetual can be held open indefinitely. This is the dominant form of crypto futures — when people say "crypto futures trading," they usually mean perpetuals.

Understanding perpetuals ties together several concepts you may have already met: leverage, margin, funding rate, and liquidation. This article shows how they fit into one product.

How Perpetual Contracts Work

Traditional (dated) futures have a built-in problem for continuous trading: they expire, forcing you to close or roll the position. Perpetuals remove the expiry — but that creates a new problem. Without a settlement date, what keeps the contract's price tied to the actual (spot) price of the coin?

The answer is the funding rate: small periodic payments exchanged directly between long and short traders.

  • When the perpetual trades above spot, longs pay shorts — nudging the price back down.
  • When it trades below spot, shorts pay longs — nudging it back up.

This continuous incentive keeps the perpetual price anchored close to spot without any expiry. Everything else works like standard leveraged futures: you post margin, choose leverage and direction (long or short), and face liquidation if losses exhaust your margin.

A worked example: you open a 10x long perpetual on BTC with 100 USDT margin (a 1,000 USDT position). You profit if BTC rises and lose if it falls; a ~10% adverse move liquidates you. On top of price P&L, each funding interval you either pay or receive a small funding amount depending on the rate and your direction — a cost that accrues the longer you hold.

Why Traders Use Perpetuals

  • No expiry to manage — no forced roll-overs; a position can stay open as long as it is funded and not liquidated.
  • Deep liquidity — perpetuals are the most actively traded crypto derivative, which tends to mean tighter spreads.
  • Two-directional, leveraged exposure — the full flexibility of futures (long/short, leverage) in a continuously tradable product.

The Risk Section — Read This Carefully

  • Leverage + liquidation apply exactly as in any futures product: an adverse move can consume your entire margin, at a price you do not choose.
  • Funding is a running cost. "No expiry" is not "no cost of carry" — holding through many funding periods, especially on a leveraged size, adds up and can quietly erode a position.
  • The lack of expiry can encourage over-holding. Because nothing forces you out, it is easy to sit in a losing position too long. Discipline (stop-losses, sizing) matters more, not less, on perpetuals.

Perpetual contracts guarantee no profit; they are a flexible but high-risk instrument that demands active risk management.

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A Practical Next Step

Learn how funding, margin, and liquidation interact on a perpetual before risking real money. WEEX offers a demo futures mode with virtual funds where you can hold a perpetual position across funding intervals and watch the combined effect on your balance. When you trade real perpetuals, use low leverage, size positions with a fixed risk cap, and set a stop-loss.

Download the WEEX app, open the futures section, and practise perpetuals in demo mode first.

FAQ

Q. What is the difference between perpetual and dated futures? A. Dated futures expire on a set date and settle; perpetuals never expire and use a funding rate to stay anchored to the spot price.

Q. How does a perpetual stay close to the spot price? A. Through the funding rate — periodic payments between longs and shorts that push the contract price back toward spot.

Q. Do I pay to hold a perpetual position? A. You pay or receive funding at each interval, depending on the rate and your position's direction. Over time this is a real cost (or income) separate from price moves.

Q. Are perpetuals riskier than spot? A. Yes. They are leveraged and can be liquidated, and they carry funding costs — none of which apply to simply buying and holding a coin on spot.

This article is general educational information about trading terminology, not investment advice. Perpetual futures trading carries a high risk of loss and guarantees no profit. Trade at your own responsibility.

Disclaimer: This content is provided for general branding and informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online events, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets or to use any services. Crypto assets are highly volatile and may result in loss. WEEX services and online events may not be available in all regions and are subject to applicable laws, regulations, and eligibility requirements. You are responsible for ensuring that your use of WEEX services complies with local laws and for carefully assessing the risks before participating in any crypto-related activities.

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