# What Are Perpetual Futures? > What are perpetual futures? Perpetual futures, or perps, are derivatives that track an asset’s price and never expire. Because there is no settlement date, longs and shorts exchange a periodic funding payment that keeps the contract close to spot. Traders use them for leverage and for easy shorting. **Source:** https://propfirmpal.com/perpetuals/guides/what-are-perpetual-futures **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._ --- _Updated 2026-11-10._ > **Note:** General information, not financial or legal advice. Rules differ by firm and change; check the firm’s own terms before you buy. ## How perpetual futures work A perpetual future is an agreement to gain or lose from a price move, with no date on which it has to be settled. You can hold one for minutes or for months, as long as you keep enough margin. A dated future converges to spot because it settles at expiry. A perpetual has no expiry, so it needs another mechanism: the funding rate. When the contract trades above its index, longs usually pay shorts. When it trades below, shorts usually pay longs. That payment rewards the side pulling the price back toward spot. ## The terms that matter Four ideas cover most of what a new perps trader needs. - **Funding** is exchanged between traders at set intervals and is charged on notional, so leverage magnifies it. - **Mark price** is what most venues use to value positions and trigger liquidations. It is not always the last traded price. - **Margin** is the collateral behind a position. Fall below the maintenance level and the position is liquidated. - **Notional** is the full position size. A $1,000 margin at 10x leverage is a $10,000 position. ## Perpetual futures in crypto, and beyond Perpetual futures crypto markets are where the contract became popular, with BTC and ETH usually the most liquid. The design is not limited to crypto: some venues list perpetuals on assets such as gold or equity indices. Whether a prop firm offers those is a separate question, and one we record firm by firm where it is published. ## What changes at a prop firm At a prop firm the same contract comes with a rule set on top. A firm decides where its prices come from, whether funding is passed through, fixed or not charged, and whether that cost moves your drawdown. Those details vary more than the headline profit split does, which is why [our funding comparison](https://propfirmpal.com/perpetuals/funding-rates) tracks them. ## Frequently asked questions ### What does perps mean? Perps is short for perpetual futures: futures contracts that have no expiry date. ### Are perpetual futures the same as futures? They are both derivatives, but a dated future expires and settles, while a perpetual stays open indefinitely and uses funding payments to stay near spot. ### Do perpetual futures have an expiry date? No. That is the defining feature. A position stays open until you close it or it is liquidated. ### Why do perpetual futures have funding? Without an expiry there is nothing forcing the price back to spot. 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