Perpetual Futures

A perpetual future is a derivative that tracks an underlying market without an expiry date. Funding payments are the mechanism that keeps the contract near spot.

Once perpetual futures is clear, the mechanics in the next section read as common sense rather than trivia.

Longs and shorts exchange funding depending on perp premium or discount.

Margin allows leveraged exposure with less upfront capital.

Mark price and maintenance margin decide liquidation risk.

Strip it back and the mechanics all point to one fact: a perpetual future has no expiry date.

If perps trade above spot and funding is positive, long traders may pay shorts until the premium becomes less attractive.

The value here is the checklist hiding inside the perpetual futures example, not the specific names or numbers used.

Watch the failure condition in any perpetual futures example; that is usually where money is won or lost, not in the happy path.

A perp is not the same as owning the asset. Funding, leverage, liquidation, and exchange rules change the payoff.

Before acting on perpetual futures, name the one thing that would have to be true, then confirm it.

With perpetual futures, the real cost is rarely the first error — it is acting on it with size before checking the assumption.

High leverage, funding spikes, liquidation cascades, and low liquidity can create losses faster than spot trading.

Write the single perpetual futures failure mode you would watch for, then size the decision around that rather than the upside.

For perpetual futures, reversible, small, and verifiable beats large and irreversible whenever the picture is still unclear.

The fastest way to retain Perpetual Futures is to use it: find a real Crypto Trading Deep Dive case and pressure-test it against the checklist.

Write your perpetual futures answers as specific, testable sentences; if a sceptic could not challenge them with evidence, they are still too vague.