Glossary

Perpetual futures

Perpetual futures are leveraged derivatives with no expiry, tethered to an index by funding payments.

In short

A perpetual future tracks an underlying asset without a settlement date. Funding payments keep it near the index price, and leverage means a small adverse move can consume a large share of the margin backing the position.

Why the instrument dominates the risk

Every strategy discussed on this site is expressed in perpetuals, so leverage, funding and liquidation apply to all of it regardless of how the positions are selected.

A diversified basket changes which decisions you are exposed to; it does not change the instrument's capacity for loss.

Past performance is not indicative of future results. Perpetual futures are leveraged instruments and carry a substantial risk of loss, including the loss of your entire position.

Questions

Frequently asked

Can I lose more than I deposit?

Losses are bounded by the collateral in the relevant account, and that collateral can be lost entirely.

Do perps expire?

No, which is why funding exists.

Keep reading

Funding rateThe tether mechanism.Risk disclosureWhat can go wrong, stated plainly.

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