What is a Perpetual Future? A Trader's Guide to 24/7 Contracts

Perpetual futures are the single most-traded instrument type in crypto. On any given day, perpetual volume across major venues dwarfs spot volume by five to ten times. They exist in forex, in commodities, in US equity mirrors on newer venues — and they are the primary way most traders express directional views in these markets.

Yet perpetual futures did not exist before 2016. They are a purpose-built financial instrument, designed to solve specific problems with traditional futures. Understanding what they solve — and what they introduce in exchange — is the first step to trading them properly.

The traditional-futures problem

A conventional futures contract has an expiry date. Buy a WTI crude oil future dated December, and on the third-last business day of November you either close it, roll it into the next contract, or accept physical delivery of 1,000 barrels of oil. That expiry date is a feature — futures were invented for producers and consumers who wanted to lock in a price for a future physical delivery.

For a speculator, it is a bug. Every expiry means paying spreads to roll into the next contract. Rolling costs money in normal markets (contango) and can pay you in others (backwardation), but either way it introduces friction that has nothing to do with your view on the underlying asset.

For crypto, where there is no physical delivery and no natural expiry cycle, traditional futures were a poor fit. So exchanges invented an alternative.

How perpetuals work

A perpetual future has no expiry date. You can hold the position indefinitely — for hours, days, months. There is no roll, no settlement, no forced close.

To keep the perpetual price anchored to the underlying spot price (which is what a real future would settle to), perpetuals use a funding rate mechanism. Every 8 hours (typical), the exchange calculates the difference between the perpetual price and the spot index, and the side of the market that is "wrong" pays the other side.

If BTC-PERP is trading at $65,100 while spot BTC is $65,000, longs are paying premium — they pay a small funding rate to shorts. This economically incentivises shorts to keep the perpetual in line. If BTC-PERP drifts to $64,900 while spot is $65,000, shorts pay longs.

Funding rates are typically small — 0.01% to 0.1% per 8-hour period is normal — but they can spike during heavily one-sided markets. Live rates for every JTX Markets perpetual are on the Funding Rates page.

What you gain

No expiry, no roll costs. Hold a position as long as your thesis holds. The only ongoing cost is funding rate (if you are on the paying side), which is transparent and knowable.

24/7 trading on crypto perpetuals. Traditional futures markets close overnight and on weekends. Crypto perpetuals never close. This matters most during weekend news events — most of the largest single-day moves in crypto have happened when traditional markets were shut.

Tight tracking to spot. Because of the funding-rate arbitrage, perpetuals almost never trade materially away from spot. The bid-ask spread on major perpetuals is typically tighter than on spot exchanges, and the depth is larger.

Leverage without margin loans. Most spot exchanges either do not offer margin or offer it on unattractive terms. Perpetuals are margin-native — you post a small amount of collateral and control a larger notional position. On JTX Markets, max leverage on crypto perps is 1:100 for exchange accounts.

What you take on

Funding-rate cost or gain. Whichever side of the market is "consensus" pays the other. In a strongly trending market with heavy positioning on one side, funding can compound to meaningful percentages over weeks.

Liquidation risk. Leverage cuts both ways. A 10× position with a 10% adverse move is a total loss. Position sizing and stop discipline matter more on perpetuals than on unlevered spot — see our position-sizing guide for the framework.

Mark-price vs last-price. Liquidations trigger off the *mark price* (a smoothed reference), not the last traded price. This is deliberate — it stops one bad print from cascading liquidations across the book. But it means the price on your screen when liquidation hits may not match the print that "caused" it.

Perpetuals beyond crypto

Perpetuals were invented for crypto but the model has spread. JTX Markets offers perpetual contracts on 35 US equities (AAPL, TSLA, NVDA and 32 more — see all), commodities (Gold, Silver, WTI, Brent, Copper) and forex crosses. The economics are the same as crypto perpetuals: no expiry, funding-rate mechanism, mark-price liquidations, 24/7 trading (equity perps trade over weekends even though the underlying NYSE listing does not).

For an equity trader used to overnight risk and pre-market gaps, having a perpetual open around the clock is a step-change in flexibility. Bad earnings after the close? React immediately, do not wait for pre-market. Geopolitical event over the weekend? Hedge or express a view on Sunday.

When perpetuals are the wrong tool

They are not always right. If you want to hold an asset you own (long-only investing), spot is usually cheaper — no funding rate, no leverage, no liquidation. If you want physical settlement (rare for most traders), you need dated futures. If your holding period is very short (intraday only) and you have no need for leverage, the perpetual funding cost is a small tax but the leverage is idle.

For any medium-to-long-horizon directional view where you want capital efficiency, perpetuals are typically the right instrument.

Getting started on JTX Markets

Every JTX Markets account — Multi-Asset Perpetuals Exchange or Prop Trading Programme — gives you access to the full 233-instrument perpetuals catalogue. Same matching engine, same execution.

If you have never traded a perpetual, start small. The Position Calculator will size your first trade so the risk is bounded, and the Funding Rates viewer shows current carry costs so you know what you are paying to hold overnight.

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