What is a perpetual futures contract and how does it work?
Futures trading used to be mainly for traditional finance, but now it’s a key part of crypto — especially in 2025. One of the most popular tools is the perpetual futures contract, or perp.
These contracts let you bet on the price of a cryptocurrency going up (long) or down (short), without having to worry about expiration dates.
So, what exactly is a perp?
A perpetual futures contract is a type of crypto trading tool (derivative) that’s similar to buying or selling crypto directly — but with leverage, meaning you can trade with more money than you actually have.
Unlike regular futures, perps never expire, so you can keep your position open as long as your account has enough funds (margin).
To help the perp price stay close to the real market price (spot price), a system called the funding rate is used:
If the funding rate is positive, people holding long positions pay those holding short positions.
If it's negative, shorts pay longs.
This helps balance the market.
Why do traders use perps?
Trade long or short whenever you want
Use leverage to boost potential profits
Hedge your spot positions to reduce risk
Trade anytime — 24/7, with no expiry dates
Whether you're speculating on Bitcoin ($BTC) or protecting your Ethereum ($ETH) holdings, perps offer flexibility that traditional markets don’t.
Why choose Binance Futures?
Binance has one of the biggest perp markets in crypto, with:
Tons of high-liquidity contracts
Up to 125x leverage
Flexible margin options (cross & isolated)
Advanced risk tools and low fees
It’s great for both quick traders (scalpers) and those holding positions longer term.
