Term

Perpetual Swap

A derivative similar to a futures contract but without expiry, kept near spot via funding payments.

Type:

derivatives

trading

basic

Perpetual swaps track an index price without settlement dates. Funding payments between longs and shorts align the contract price with spot.

Example 1.1

"A BCH perpetual swap trading above spot results in positive funding—longs pay shorts until prices converge."

risk

Leverage magnifies gains and losses. Liquidations can occur quickly in volatile markets; risk controls and position sizing are essential.

Example 2.1

"Using 10x leverage, a 10% adverse move can wipe out the position via liquidation."

A derivatives contract to buy or sell an asset at a predetermined price at a future date; in crypto, perpetual futures (no expiry) are most common.

A periodic payment exchanged between longs and shorts on perpetual futures to keep contract prices anchored to spot.

Leverage uses borrowed funds to increase position size, amplifying both gains and losses.

Liquidation is the forced closure of a leveraged position when collateral is insufficient to cover losses, protecting the exchange or lenders.

All terms and definitions may update as the Cryptionary improves.