Perpetual futures are different from traditional futures contracts. This guide covers how perpetual futures work, how to trade them – plus, how traders can use these instruments to access commodities and indices with continuous market exposure.
Perpetual futures (also called perpetual swaps, perp crypto or crypto perpetuals) are derivative contracts that track an underlying asset's price (e.g., stocks, crypto, commodities) without requiring ownership of that asset and without an end date on the contract itself.
That last part is what sets perpetuals apart. Spot trading is the buying of the actual asset and owning it outright. Traditional futures expire on a fixed date, settling or rolling into a new contract.
Perpetuals do neither: a trader can hold a position indefinitely, as long as their margin requirements are met.
Economist Robert Shiller first theorized this concept in 1993, as a way to create liquid markets for assets that are otherwise hard to trade directly. The first commercially successful version for digital assets arrived in May 2016 and perpetuals have since become one of the most heavily traded instruments in crypto markets.
Feature | Spot trading | Traditional futures | Perpetual futures |
|---|---|---|---|
Ownership | Direct ownership of the asset | Contractual right, no direct ownership | Contractual right, no direct ownership |
Expiration | None (you hold the asset) | Fixed date | None |
Leverage | Generally none or limited | Common | Common, adjustable |
Price tracking | Market price | Converges to spot near expiry | Funding rate keeps price near spot |
Opening a perpetual futures contract comes down to three choices:
Traders would go long if they expect the price to rise and vice versa.
That two-way flexibility sets perpetuals apart from directly owning an asset. A spot holder only benefits when prices rise. A perpetual futures trader can position for either direction, which can be useful both for directional bets and for offsetting risk elsewhere in a portfolio.
Leverage lets a trader control a larger position than their account balance alone would allow, by borrowing exposure against posted collateral.
An example of leverage at workIf a trader starts with a $1,000 capital and opens a position five times the size of the deposited collateral, he’s effectively putting $5,000 on the line. Gains and losses scale by the same multiple. Two margin thresholds sit underneath every leveraged position. Initial margin is the minimum collateral needed to open the trade. Maintenance margin is the lower threshold that must be maintained afterward; drop below it and the position risks automatic closure. |
The trade-off at the heart of perpetual futures is that leverage improves capital efficiency but it concentrates risk in equal measure.
Since there's no expiry date to force a perpetual contract back toward spot, the funding rate does that job instead: a periodic payment exchanged directly between long and short position holders, usually every eight hours.
Here's how it may play out:
Arbitrageurs speed this along. They open positions specifically to collect funding payments, adding buying or selling pressure that closes the gap between contract and spot prices. This is how perpetual markets stay open twenty-four hours a day without a final settlement.
An example of price anchoringSay a gold perpetual contract trades at $2,010 while spot gold sits at $2,000. The funding rate turns positive, so longs pay shorts. That payment rewards shorts for holding their position and draws in new short sellers, both of which push the contract price back down toward $2,000. |
Leverage brings risks that don't exist in ordinary spot trading. The main ones are forced liquidation, slippage during fast moves and the slow drag of funding costs on positions held for extended periods.
Margin mode | How it works | Risk profile |
|---|---|---|
Isolated margin | Collateral is assigned to one position only. | A losing trade can't draw down the rest of the account. |
Cross margin | The full account balance backs all open positions. | More flexibility, but a loss on one position exposes the entire balance. |
Isolated margin caps how much a single losing trade can cost, only the collateral allocated to that position is at risk. Cross margin is more flexible across multiple positions, at the cost of sharing exposure across the whole balance.
An example of isolated vs. cross marginSay a trader has $1,000 and opens two positions. Under isolated margin, they might assign $500 to each: a loss on one stops at $500, leaving the other position untouched. Under cross margin, both positions draw from the same $1,000 pool, so a large loss on either reduces the collateral backing both. |
If account equity for a position drops below the maintenance margin, the platform's engine may close it automatically to stop the balance from going negative. In fast markets, that liquidation may not fill at the exact trigger price; this gap is known as slippage and it can leave a trader worse off than expected.
Liquidations can also cluster. Forced selling from one liquidation can push prices lower, tripping the threshold on other positions and creating a cascading liquidation.
On October 10, 2025, roughly nineteen billion dollars in leveraged crypto positions were liquidated globally within a single day.
Pre-entry ‘Take Profit’ (TP) and ‘Stop Loss’ (SL) orders are the most practical defense here. Set them before opening a position and your exit points are already locked in. It removes the need to react in real time when the market moves fast.
Single Stock Perpetuals let traders take perpetual futures positions on individual equities (e.g., stocks like AAPL, TSLA, NVDA) using the same no-expiration, funding-rate-anchored structure as crypto perps.
For traders used to standard market hours, it may take some getting used to. Equity markets close each evening and on weekends; a trader can react to overnight news or a weekend headline without waiting for the opening bell.
If you want to access perpetual futures contracts, you have to use a regulated venue. Here’s how you can start trading perps with us.
Download the Crypto.com Exchange app from the App Store or Google Play. Then, complete the standard identity verification (KYC) process to ensure your account meets regulatory standards for derivatives trading.
Note: The Crypto.com Exchange app isn’t the same as the standard Crypto.com App. Be sure you download the correct one.
Navigate to the ‘Derivatives’ or ‘Trading’ section in the app. If you’re a new user, you may need to enable these features by reviewing and accepting the relevant membership agreements and disclosures.
Fund your account using your preferred method (e.g., debit/credit card or bank transfer) to start trading perpetual contracts. All of these contracts are USD-settled, which means that margin, profits and losses are calculated and paid in US dollars.
Once your account is funded, you can use the search function to find specific tickers for the markets you want to enter.
Review the contract details, including the current funding rate and margin requirements. Choose your leverage rate and decide whether to go long or short based on your market outlook. Review your order carefully before confirming the trade and always manage your risk by monitoring the position closely.
Access precious and industrial metals with 24/7 liquidity. This is designed to address ‘weekend gap risk’, where prices move while traditional markets are closed. Available contracts include:
Trade on the volatility of global energy supplies without the complexity of physical settlement. Contracts include:
Gain broad exposure to US equity markets. These contracts track the performance of leading benchmarks:
Sign up here to get started.
What are perpetual futures in crypto?
Perpetual futures, sometimes called perp crypto, are derivative contracts that track an asset's price without an expiration date. Traders can hold positions indefinitely, provided margin requirements continue to be met.
How do funding rates work in perpetual swaps?
Usually every eight hours, the platform compares the contract price to spot. If the contract trades higher, longs pay shorts; if it trades lower, shorts pay longs, nudging the contract price back toward spot.
What is the difference between spot trading and perpetual futures?
Spot trading means buying and directly owning the underlying asset. Perpetual futures track an asset's price with no direct ownership and they may allow leverage, which spot trading generally doesn’t.
What are Single Stock Perpetuals (SSPs)?
SSPs are perpetual futures contracts on individual equities, such as AAPL, TSLA or NVDA. They give traders 24/7 equity exposure with a certain extent of leverage, with no traditional brokerage account required.
How does isolated margin protect account balances?
Isolated margin assigns a fixed amount of collateral to a single position. If that position is liquidated, the loss stops at the collateral allocated to it. The rest of the account balance stays untouched.
Can perpetual futures contracts expire?
No. Unlike traditional futures, perpetual contracts have no expiration date and never need rolling into a new contract. Positions can be held indefinitely as long as margin requirements are met.
What happens during a liquidation in perpetual trading?
When account equity for a position drops below the maintenance margin, the platform may close the position automatically to stop the balance from going negative. In volatile markets, this may contribute to cascading liquidations.
How can I set ‘Take Profit’ and ‘Stop Loss’ orders?
Most platforms, including Crypto.com, let traders configure ‘Take Profit’ and ‘Stop Loss’ levels before a position is even opened, so exit points are already in place if the market moves sharply.
Important information: This article is provided by Crypto.com for informational and educational purposes only. Nothing contained in this article constitutes, or is intended to constitute, financial advice, investment advice, trading advice, legal advice, tax advice, or any other form of professional advice or recommendation. The information presented herein should not be relied upon as a basis for making any financial, investment, or trading decisions.
Trading perpetual contracts, futures, options, and other derivatives—including the use of margin and leverage—involves a high level of risk and may not be suitable for all users. You may lose all or more than your initial margin, and losses can occur rapidly due to volatility, leverage, or adverse market conditions. The use of leverage amplifies both potential gains and potential losses, and you should not trade with capital you cannot afford to lose. Liquidation may occur if maintenance margin requirements are not met, and funding rates, settlement mechanisms, expiry conditions, or pricing mechanisms may vary between instruments and trading sessions. Past performance is not indicative of future results, and no representation or warranty is made regarding future performance.
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