# Perpetual futures glossary

> 24 perpetual futures terms in plain English.

**Source:** https://propfirmpal.com/perpetuals/glossary  
**Generated:** 2026-11-11  
**Publisher:** Prop Firm Pal - independent prop firm comparison

_Prop Firm Pal earns affiliate commission from some listed firms. This is disclosed on-site and does not affect the computed ranking order._

---

## Contract

- **Perpetual futures (perps):** A futures contract with no expiry date, held near the spot price by periodic funding payments between longs and shorts.
- **Mark price:** The reference price a venue uses to value open positions and trigger liquidations, usually built from an index and recent trading so one thin print cannot liquidate traders.
- **Index price:** An average of spot prices from several venues, used as the anchor that funding and the mark price are measured against.
- **Last price:** The price of the most recent trade. It can differ from the mark price, which matters when a firm enforces stops or drawdown on one and not the other.
- **Basis:** The difference between a derivative’s price and the spot price of the same asset.
- **Notional value:** The full size of a position in dollars: quantity multiplied by price. Fees and funding are charged on notional, not on margin.
- **Open interest:** The total size of positions still open in a market. Rising open interest means new positions are being added.

## Funding

- **Funding rate:** The periodic rate that longs pay shorts when positive, and shorts pay longs when negative, keeping a perpetual close to spot.
- **Funding interval:** How often funding is exchanged. Common intervals are one, four and eight hours, and they vary by venue and sometimes by market.
- **Premium index:** A measure of how far a perpetual trades above or below its index, and the main input to a funding rate.
- **Live venue funding:** A prop firm passes through the actual funding of a real venue, so what you pay moves with that market.
- **Fixed swap:** A prop firm charges a set holding rate instead of the venue’s funding, so the cost is predictable but can differ from the real market.

## Margin

- **Isolated margin:** Margin assigned to one position only. If that position is liquidated, the loss is limited to the margin set aside for it.
- **Cross margin:** One margin balance shared across positions. It can delay a liquidation, but it puts the whole balance at risk.
- **Initial margin:** The collateral needed to open a position, equal to notional divided by leverage.
- **Maintenance margin:** The minimum collateral needed to keep a position open. Falling below it triggers liquidation.
- **Liquidation price:** The mark price at which a position is closed by the venue because its margin has fallen to the maintenance level.
- **Auto-deleveraging (ADL):** A venue’s last resort in extreme moves: reducing profitable opposing positions when a liquidation cannot be filled in the market.

## Prop firm rules

- **Simulated execution:** Orders are filled against a price feed in the firm’s own system, with no order sent to a real market.
- **Copied execution:** A firm mirrors a trader’s orders onto a real venue, so fills and funding can reflect that market.
- **Drawdown basis:** What a firm measures loss limits against: live equity, closed balance, or an end-of-day snapshot.
- **Price feed:** The source of the prices a prop firm uses to fill orders and calculate rules. A wick on one venue may not exist on another.
- **Weekend holding:** Whether a position may stay open over the weekend. Crypto perpetuals trade all week, so funding and liquidation risk continue.
- **Payout rail:** How a firm pays out profit, such as USDC on a named chain, another stablecoin, or a bank transfer.

## Related pages

- [Crypto funding rates by prop firm](https://propfirmpal.com/perpetuals/funding-rates)
- [Funding schedule](https://propfirmpal.com/perpetuals/funding-schedule)
- [Perpetual futures markets](https://propfirmpal.com/perpetuals/markets)
- [Perpetual futures calculators](https://propfirmpal.com/perpetuals/calculators)
- [Perpetual futures guides](https://propfirmpal.com/perpetuals/guides)
- [Trading platforms by prop firm](https://propfirmpal.com/perpetuals/trading-platforms)
- [Perpetual futures prop firms compared](https://propfirmpal.com/perpetuals)