Perpetual Swap
derivatives · trading
A derivative similar to a futures contract but without expiry, kept near spot via funding payments.
Perpetual swaps track an index price without settlement dates. Funding payments between longs and shorts align the contract price with spot.
Leverage magnifies gains and losses. Liquidations can occur quickly in volatile markets; risk controls and position sizing are essential.
Related terms
Futures
→Futures are derivatives for long or short exposure to an asset; crypto markets commonly use perpetual futures with no expiry.
trading · derivatives
Funding Rate
→A funding rate is the periodic payment between long and short perpetual futures positions that helps anchor price to spot.
trading · derivatives
Leverage
→Borrowed or synthetic exposure that increases position size, amplifying both gains and losses.
markets · derivatives
Liquidation
→The forced closure of a leveraged position when collateral falls below required margin.
markets · derivatives