What Is a Perpetual Future? The Complete Beginner Explainer

What is a perpetual future? In one sentence: it is a derivatives contract that tracks the price of an underlying asset without a fixed expiry date, so you can hold a position for minutes or months without ever rolling into a new contract. Perpetual futures, usually called perps, are the dominant trading instrument in crypto, and they are the only instrument class we offer at MyFundedPerps. This explainer walks through what a perp is, how it differs from a traditional future, and the core mechanics you need before placing your first trade.

The definition, plainly

Our own documentation glossary defines a perpetual future as a derivatives contract without a fixed expiry date. Three ideas sit inside that definition:

• Derivatives contract: you are trading price exposure, not the asset itself. Buying a BTC perp does not put bitcoin in a wallet; it gives you a position that gains or loses as BTC's price moves.
• Tracks an underlying: the perp's price follows the spot price of the asset, whether that is bitcoin, a stock index, gold, or a currency pair.
• No expiry: a traditional futures contract settles on a set date, forcing you to close or roll. A perp never expires. You exit when you choose, or when your margin can no longer support the position.

One clarification specific to us: MyFundedPerps simulates trading these markets on real market data; it does not place exchange orders on your behalf. Your challenge fee buys evaluation access, and approved cash payouts are real.

Perp vs traditional future vs spot

The no-expiry design is what made perps popular. A trader with a three-month view does not need to manage contract rolls, and a scalper uses the same instrument as a position trader.

What is a perpetual future position made of?

Every perp position reduces to a handful of terms, all defined in our docs glossary:

• Notional value: the position quantity multiplied by price, before leverage converts it to a margin requirement. A $10,000 BTC position has $10,000 of notional no matter how little margin backs it.
• Leverage: the ratio between position notional and assigned margin. More leverage magnifies the effect of price movement relative to your margin. At 10x, $1,000 of margin controls $10,000 of notional, and a 1% price move is a 10% swing on your margin.
• Long vs short: longs profit when price rises, shorts profit when it falls. Perps make shorting as simple as buying.
• Mark price: the platform's reference price used for account valuation and risk checks. On our Lighter forex markets, Lighter's mark price drives candles, valuation, triggers, risk checks, and market-fill reference. Liquidations and loss rules key off mark price, not the last trade.
• Equity: your account value including open positions at current marks. Our drawdown and daily loss rules measure equity, so open losses count immediately.

Margin modes: cross and isolated

Perp platforms, including ours, offer two margin modes:

• Cross margin: eligible account collateral supports all cross-margin positions together. Liquidation sits further away because the whole balance backs each trade, but a bad position can drain the account.
• Isolated margin: each position gets a fixed margin bucket. Your loss on that trade is limited to the assigned margin, which suits sizing risk per position across several trades.

Either way, account-level rules still apply. At MyFundedPerps the max drawdown and daily loss limit are measured on account equity, so liquidation is not the only floor that matters. Our myfundedperps-static-drawdown article explains the account floors in detail.

Why perps do not drift from spot: funding and swaps

A contract with no expiry needs a mechanism to keep its price near spot, because there is no settlement date forcing convergence. On exchanges, that mechanism is the funding rate: periodic payments between longs and shorts that push the perp price back toward spot.

At MyFundedPerps we handle this differently. Venue funding rates shown in the terminal are informational only; they do not touch your balance. Instead, a swap fee is charged hourly to both longs and shorts: 3 bps per day on crypto, 1.5 bps per day on stocks, commodities, and indices, and 0.5 bps per day on forex (rates as of September 2026; check docs.myfundedperpetuals.com for current figures). Our funding-rates-vs-swap-fees article covers the mechanics, and myfundedperps-fees-breakdown puts them in the full cost picture.

Where you can trade perps with us

At launch in September 2026 we listed 130 perpetual markets across crypto (majors, L1, L2, DeFi, AI, and meme sectors), stocks, indices, forex, and commodities, sourced from Hyperliquid, Binance, Bybit, and Lighter. Leverage varies by market: BTC and ETH at 10x with $1,000,000 exposure caps, FX at 50x, major indices at 12x, stocks at 5x, and most altcoins at 3x, all as of launch day, September 2026; figures may have changed since. The live list is at myfundedperpetuals.com/exposure-caps and the markets page, and our myfundedperps-markets-guide walks the catalog.

Order basics

Two order types cover most beginner needs:

• Market order: executes immediately at top of book, with maximum adverse slippage capped against the mark by a size-based tier. Better prices are preserved.
• Limit order: fills its full size at exactly the limit price once the market reaches it.

You can attach Stop Loss and Take Profit instructions, which trigger exits when a configured price condition is reached. On a leveraged perp, a stop loss is not optional equipment; it is how you define the trade's risk before you enter.

Frequently asked questions

What is a perpetual future in simple terms?

It is a contract that lets you profit from an asset's price moves, up or down, with leverage, and with no expiry date. You never own the underlying asset, and you can hold the position as long as your margin supports it.

Do perpetual futures expire?

No. That is the defining feature. Unlike traditional futures, which settle on a fixed date, perps continue indefinitely until you close the position or it is liquidated.

What is the difference between mark price and last price?

Mark price is the platform's reference price for valuation and risk checks, including liquidations and loss-rule checks. The last trade price is just the most recent execution. Risk decisions key off mark price to avoid manipulation through thin prints.

Is trading perps at MyFundedPerps real trading?

MyFundedPerps simulates trading on real market data and does not place exchange orders for you. Challenge fees buy evaluation access, not a deposit, and approved cash payouts are real.

What leverage can I use on MyFundedPerps?

It depends on the market: 10x on BTC and ETH, 50x on forex, 12x on major indices, 5x on stocks, and 3x on most altcoins, as of launch day, September 2026; figures may have changed since. See myfundedperpetuals.com/exposure-caps for the current table.