Cryptocurrency • Perpetuals & Funding • Intermediate Level

Perpetual Swaps (Perps)

Definition: Derivative contracts tracking the spot price of a cryptocurrency without an expiry date.

Comprehensive Institutional Breakdown

Unlike traditional futures that settle on a specific quarterly date, perpetual contracts remain open indefinitely and use a periodic funding rate mechanism to anchor contract prices to spot market indexes.

Carl Brent Anthony Institutional Rule
Always account for funding rate drag and leverage limits when calculating your 1.5% risk cap on perps.
Cross-Market & Execution Note
Unique to crypto; traditional markets use quarterly expiring futures (CME, E-mini).