Perpetual Futures: A Practical Overview

When working with perpetual futures, derivative contracts that never expire and require periodic funding payments to keep the price aligned with the spot market. Also known as crypto perpetual contracts, they let traders stay long or short indefinitely without needing to roll over positions. Mastering perpetual futures can give you an edge in the fast‑moving crypto market. They’re popular on both spot‑heavy platforms and dedicated derivatives hubs because they let you capture price moves without owning the underlying token. Because there’s no expiry date, you can keep a position open as long as your margin holds, which makes them suitable for long‑term hedging or short‑term swing trades.

Key Concepts Behind Perpetual Contracts

Traders use leverage, the ability to control a larger exposure with a fraction of the capital to magnify potential returns, but the same mechanism can trigger rapid liquidation, forced closing of a position when margin falls below maintenance requirements if prices move against them. The funding rate, a recurring payment exchanged between long and short sides based on the price difference between the perpetual contract and its underlying asset acts as a balance beam, pulling the contract price back toward spot. Most platforms—whether a centralized exchange like Bybit or a decentralized protocol—must embed a liquidity engine, the system that matches orders and distributes funding fees that can handle high‑frequency trades and sudden market swings. Risk controls such as auto‑deleveraging, insurance funds, and real‑time margin calls are built into these engines to protect the market from cascading liquidations. At the same time, evolving regulatory frameworks, rules such as the EU’s MiCA that set licensing, capital, and consumer‑protection standards for crypto derivatives shape how crypto exchanges, services that offer trading, custody, and market data for digital assets list and manage perpetual futures. Understanding these moving parts helps you gauge risk, comply with local laws, and pick the right venue for your strategy.

Below you’ll find deep dives on everything from EU cross‑border compliance under MiCA to how Bybit’s geofencing impacts market access, plus step‑by‑step guides on funding‑rate calculations, liquidation safeguards, and optimal leverage sizing. The collection covers regulatory angles, technical mechanics, and practical tips, so whether you’re sizing up margin, checking the latest legal updates, or hunting for the most competitive fees, you’ll have actionable insight to navigate the perpetual futures landscape with confidence.