Plain English
Perpetuals (perpetual futures, “perps”) are futures contracts with no expiration date. They are the dominant derivative product on crypto exchanges. Use funding rates — periodic payments between longs and shorts — to keep the perpetual price close to the underlying spot price.
How it actually works
If perpetual prices trade above spot, funding goes from longs to shorts; if below spot, shorts pay longs. The funding rate adjusts as the gap to spot changes. Traders use perpetuals for leveraged directional bets, hedging, and capturing funding-rate spreads (basis trading). Most retail crypto leverage happens through perpetuals on Binance, Bybit, Hyperliquid, dYdX.
What it means for you
Perpetuals are where most leveraged traders get liquidated. They are also where sophisticated traders capture structural yield through basis trades. The line for members: never use perpetual leverage you would not be willing to lose entirely.
We cover perpetuals primarily as a hedging tool and as the mechanic underlying delta-neutral funds (Ethena and others). Active perpetual trading is not a strategy we teach.
Educational content only. Not investment, tax, or legal advice.