Perpetual futures are derivatives that let traders take long or short exposure to a market without owning the underlying asset. Unlike traditional futures, they do not have a scheduled expiry date.
Traders usually call them perps, perpetuals, or perpetual contracts.
That lack of expiry is the main difference.
Traditional futures expire. Perpetual futures do not.
Because there is no scheduled settlement pulling the contract toward its underlying market, most perps use funding payments between long and short traders to help keep prices aligned.
Perpetual futures are most closely associated with crypto markets such as Bitcoin and Ethereum. However, they are no longer limited to crypto majors. Depending on the venue, traders can also find perpetual products linked to tokenized stocks, indices, commodities, metals, energy, and forex.
The same product is now beginning to appear more clearly in prop trading. Some firms allow traders to complete evaluations and trade simulated perpetual futures accounts using prices derived from live markets.
Perp is simply shorthand for a perpetual futures contract or perpetual contract.
Traders may also come across:
These terms are often used for products built around the same basic idea: derivative exposure without the fixed expiry of a traditional futures contract.
Crypto perpetual futures are perps linked to cryptocurrency markets such as Bitcoin, Ethereum, and other digital assets.
A BTC perpetual contract, for example, gives a trader exposure to Bitcoin's price without requiring them to buy Bitcoin in the spot market.
Traders can go long or short, use margin and leverage where permitted, and keep a position open without having to roll into a new contract simply because an expiry date arrives.
The trader still holds a derivative rather than the underlying cryptocurrency.
That distinction becomes important once funding, margin, liquidation, and platform-specific risk rules enter the picture.
Perpetual futures combine these main ideas:
A trader goes long when they expect the market to rise and short when they expect it to fall.
If the market moves in the expected direction, the position gains value. If it moves against the trader, the position loses value.
Perpetual futures are commonly traded on margin.
Margin is the capital supporting the position rather than the full notional value being controlled.
The funding rate is one of the mechanics that separates perpetual futures from traditional futures.
Traditional futures have an expiry date. Conventional perps do not.
Funding helps compensate for that missing expiry mechanism by encouraging the perpetual contract to remain reasonably close to the market it tracks.
On many venues, funding payments pass directly between traders holding long and short positions.
When funding is positive, long positions generally pay short positions.
This is commonly associated with the perpetual contract trading above its reference market.
When funding is negative, short positions generally pay long positions.
That can occur when the perpetual trades below its reference market.
The payment creates an incentive on either side of the market that can help reduce the difference between the perpetual contract and its reference price.
Funding is therefore not simply another trading fee.
It is part of the mechanism that allows a contract with no scheduled expiry to remain anchored to the market it represents.
There is no universal funding schedule.
Some exchanges calculate or settle funding hourly. Others use longer intervals, and the formula itself can vary between exchanges and products.
The useful questions are:
For prop traders, there is another question: whether simulated funding debits or credits are reflected in the account at all.
The important point is not to carry assumptions from one exchange into another.
Traditional futures move toward expiry and settlement, while perpetual futures don’t.
Without another mechanism, a perpetual contract could drift too far from the market it is designed to track.
Funding helps counter that.
If demand for long exposure pushes the perpetual above its reference market, positive funding can make holding long positions more expensive while compensating shorts.
When short positioning pushes the perp below the reference market, negative funding can work in the opposite direction.
The formula varies by venue, but the broad objective to keep the perpetual futures price reasonably aligned with its underlying market is the same.
Leverage allows a trader to control a position larger than the margin supporting it.
The trade-off is that losses can consume that margin quickly.
If an account no longer meets the provider's margin requirements, the position may be automatically reduced or closed.
That is liquidation.
How and when liquidation occurs depends on the provider and can be influenced by factors such as:
Higher leverage generally leaves less room for the market to move against the position before margin becomes a problem.
That is why leverage should not be viewed only through the potential return it creates.
It changes the downside too.
Some perpetual futures providers use a mark price when calculating unrealized P&L, margin requirements, or liquidation risk.
Rather than relying only on the most recent traded price, the mark price provides a separate reference value.
Its calculation may incorporate:
The methodology varies by provider.
Traders should remember that the price used for liquidation or risk calculations may not always be identical to the latest traded price shown on the chart.
The easiest way to see how perps differ is to compare them with traditional futures contracts.
| Feature | Perpetual Futures | Traditional Futures |
| Scheduled expiry | No | Yes |
| Contract rollover | No regular expiry rollover | Required if continuing exposure beyond expiry |
| Long and short | Yes | Yes |
| Margin | Common | Common |
| Leverage | Common | Common |
| Funding mechanism | Common | No perp-style funding mechanism |
| Contract months | Usually no expiry-month sequence | Specific contract months |
| Trading hours | Often 24/7 for crypto perps | Depends on exchange and product |
| Main operational issue | Funding, margin, liquidation | Expiry, rollover, contract selection |
The biggest difference is expiry.
A traditional futures trader who wants to maintain exposure after the current contract expires may need to move into a later contract month.
That process is known as futures rollover.
Perpetual futures remove the scheduled rollover.
In its place comes a different ongoing consideration: funding.
Traditional futures traders need to understand expiry and contract selection. Perpetual futures traders need to understand funding, margin, leverage, and liquidation.
Conventional perpetual futures do not have a scheduled expiry date.
That is their defining feature.
A Bitcoin perp doesn’t need to move from a September contract into December simply because the calendar changes.
But “no expiry” doesn’t mean the position lasts forever.
A trade can still be:
The contract may not have a scheduled expiry, but the position can still end.
Perpetual futures are also different from buying the underlying asset.
If a trader buys Bitcoin in the spot market, they are buying the asset itself.
A Bitcoin perpetual position is a derivative linked to Bitcoin's price.
| Feature | Perpetual Futures | Spot Trading |
| Exposure | Derivative | Underlying asset |
| Own the underlying asset | No | Trader buys the asset |
| Long | Yes | Yes |
| Short | Generally available | Requires extra structure on many venues |
| Leverage | Common | Depends on venue/account |
| Funding | Can apply | No perp funding |
| Liquidation risk | Can apply when margined | Not part of ordinary unleveraged spot ownership |
| Scheduled expiry | No | Not applicable |
A BTC spot purchase and a BTC perp long may both benefit when Bitcoin rises.
They are still different products with different risk mechanics.
This distinction becomes particularly important in prop trading.
A perpetual future and a crypto CFD can both provide leveraged market exposure without ownership of the underlying asset.
That does not make them the same instrument.
| Feature | Perpetual Futures | Crypto CFDs |
| Structure | Perpetual derivative market | Contract with broker/provider |
| Scheduled expiry | Usually none | Usually none |
| Price source | Perp market / exchange-style pricing | Broker or liquidity-provider pricing |
| Holding cost | Funding can apply | Swaps, financing, or broker-defined charges can apply |
| Typical platforms | Exchange or proprietary perp terminal | MT5, cTrader, DXtrade, Match-Trader, TradeLocker |
| Long and short | Yes | Yes |
| Prop use | Emerging | Established |
A prop firm offering crypto is therefore not automatically offering perpetual futures. Traders comparing broader crypto access can also browse prop firms that offer crypto.
The product structure and platform still need to match.
Part of the appeal is operational simplicity.
Because there is no scheduled expiry, traders do not need to keep moving their exposure from one contract month into another. They can also take long or short positions without owning the underlying asset, while margin and leverage can provide greater market exposure relative to the capital supporting the position.
Crypto has added another attraction: trading hours. Many crypto perpetual markets operate 24/7, and major Bitcoin and Ethereum perps can attract substantial trading activity.
The market is also becoming broader. Depending on the venue, perpetual products may now be linked to:
That expansion is beginning to show up in prop trading too.
The advantages come with trade-offs. No scheduled rollover does not remove funding, leverage, liquidation, or liquidity risk.
Removing scheduled expiry does not remove trading risk.
Leverage magnifies both gains and losses.
In a live margined position, enough adverse movement can reduce the account below its margin requirements and trigger forced position reduction or liquidation.
Funding can work for or against the position.
A trader can be correct on market direction and still give up part of the return through repeated funding payments.
Rates are not fixed either. They can change as positioning and market conditions change.
Crypto markets can move sharply at any time, and not every perpetual market has the same depth as BTC or ETH.
Smaller or newer products may trade with wider spreads and thinner liquidity.
Margin requirements, funding formulas, leverage, liquidation rules, maintenance periods, and price calculations can differ between providers.
Prop traders also operate inside another layer of restrictions, which can include:
A perps trader therefore needs to understand both the market mechanics and the rules of the account being traded.
Perpetual futures are creating a newer category within funded trading.
A perpetual futures prop program generally lets a trader complete an evaluation and trade simulated perpetual contracts under the firm's rules.
Those contracts can use prices derived from live crypto or perpetual futures markets.
That does not necessarily mean the trader's order is being sent to the live exchange.
A prop account can therefore combine:
live-market pricing + simulated execution + real payout eligibility
depending on the firm's structure.
That distinction between price source and execution model is one of the most important things to understand when comparing perps prop programs.
A typical structure may look like this:
The broader prop model is familiar.
What changes is the instrument being traded and the mechanics that come with it.
They can be simulated.
Live pricing does not automatically mean live execution.
Because this category is developing quickly, traders should not assume every perps firm follows the same structure.
Traders can also browse crypto prop firms offering simulated funded accounts on Prop Firm Match
Simulation does not make the underlying market irrelevant.
If the account is using prices derived from a real perpetual market, the character of that market still feeds into the trading environment.
A deep BTC or ETH market may offer tighter pricing and greater depth.
A thinner altcoin or tokenized market may behave very differently.
Liquidity can influence:
That becomes increasingly relevant as perpetual futures expand into less mature asset categories.
The word futures appears in both, but the experience can be quite different.
| Feature | Perpetual Futures Prop | Traditional Futures Prop |
| Product | Perpetual contracts | Exchange-listed futures |
| Scheduled expiry | No | Yes |
| Rollover | No normal expiry roll | Periodic rollover |
| Funding | Can apply | No perp-style funding |
| Trading hours | Often around the clock | Exchange session hours |
| Price source | Perps/crypto markets | Futures exchanges |
| Platforms | Exchange-style or proprietary terminals | Tradovate, NinjaTrader, Rithmic and similar futures platforms |
| Evaluation stage | Commonly simulated | Commonly simulated |
| Funded stage | Can remain simulated | Can be simulated or include live progression depending on firm |
Neither model is inherently better.
They are different products with different operational and risk mechanics.
Traders comparing the traditional futures side can browse futures prop firms on Prop Firm Match.
This is one of the more important distinctions for traders researching crypto prop firms.
Not every crypto program is a perpetual futures program, so PFM Research looks at the underlying product and trading structure rather than the word “crypto” alone.
Platform structure is one signal. Programs running through conventional CFD platforms such as MT5, cTrader, Match-Trader, DXtrade, or TradeLocker are generally treated as crypto CFD programs unless stronger product evidence shows otherwise.
The firm's own product description also matters. If a firm explicitly describes its program as perpetual futures or perps, that provides stronger evidence of the intended instrument structure.
An exchange platform or proprietary terminal built around a named perpetual market can also support a perps classification.
What does not prove it on its own is:
The actual contract and trading structure are what matter.
This is still an emerging category, so firm examples are better treated as a dated snapshot than a permanent list.
The significance is less about the number of firms than the direction of the market.
Perpetual futures are beginning to appear as a distinct product category within prop trading rather than simply being grouped with generic crypto accounts.
Because that landscape can change quickly, the live Crypto and Perps section on Prop Firm Match is the better place to see the current list.
Account size and price are only the starting point.
Establish whether the account uses perpetual futures, crypto CFDs, or different instruments depending on the platform.
Exchange-derived pricing does not necessarily mean orders are executed on a live exchange.
Know which exchange or market provides the underlying pricing.
A program may cover Bitcoin and Ethereum only, or extend into altcoins, tokenized stocks, indices, metals, energy, and forex perps.
Leverage can differ by asset. One headline figure should not automatically be assumed across every available market.
Look at daily loss, maximum drawdown, static versus trailing rules, balance versus equity calculations, and whether evaluation and funded-stage conditions differ.
Find out whether funding debits or credits appear in the account and how the underlying venue calculates them.
The relevant costs can include commissions, maker/taker fees, spreads, funding, and platform charges.
Payout frequency, profit split, minimum withdrawals, consistency rules, caps, and funded-stage conditions all shape how profits become eligible for withdrawal.
Traders can also compare prop firms that pay via crypto on Prop Firm Match.
Automation, copy trading, hedging, arbitrage, high-frequency trading, multiple accounts, and other trading behavior may be governed by separate program rules.
This is where a perps account starts to look less like a simple crypto product and more like a full prop trading structure.
Not necessarily. Perpetual futures remove one operational issue, which is scheduled contract expiry.
They replace it with another ongoing mechanic, and that is funding.
Perps can appeal to traders who value no scheduled rollover, around-the-clock crypto markets, long and short exposure, and access to crypto-native or emerging multi-asset perpetual products.
Traditional futures offer a different environment built around established futures exchanges, standardized contract specifications, traditional futures platforms, defined sessions, and familiar index, commodity, rate, and currency markets.
The more useful question is not which structure is universally better.
It is which market mechanics fit the trader's strategy.
Perpetual futures are relatively easy to explain.
That does not make them automatically easy to trade.
Removing expiry means one less futures concept to manage, but traders still need to understand leverage, margin, liquidation, mark price, funding, volatility, liquidity, fees, position sizing, and platform rules.
A prop account adds another layer, like drawdown, daily loss, consistency requirements, payout conditions, and prohibited strategies.
A beginner therefore needs to understand how the product works and how the prop firm's rules work around it before choosing an account.
Perpetual futures are derivative contracts that allow traders to take long or short exposure to an underlying market without owning the asset. Unlike traditional futures, conventional perpetual futures do not have a scheduled expiry date.
“Perps” is shorthand for perpetual futures or perpetual contracts.
Traders take long or short positions, often using margin and leverage. Most perpetual futures use funding payments or a similar mechanism to help keep the contract price close to its underlying reference market.
Conventional perpetual futures do not have a scheduled expiry date. Individual positions can still be manually closed, stopped out, liquidated, or closed because of platform or account rules.
The funding rate determines periodic payments associated with long and short perpetual positions. On many venues, positive funding means longs pay shorts, while negative funding means shorts pay longs.
It depends on the provider and product. There is no universal funding interval.
Yes. A live leveraged position can be liquidated if margin requirements are no longer met. Prop accounts can also fail because of firm-specific drawdown or loss rules.
Traditional futures have scheduled expiration dates and may need to be rolled into later contracts. Perpetual futures do not have scheduled expiry and commonly use funding to help keep the contract aligned with the underlying market.
Spot trading involves buying or selling the underlying asset. Perpetual futures are derivatives that provide price exposure without ownership of that asset.
No. Both can provide leveraged exposure without ownership, but their product structures, platforms, price sources, and holding-cost mechanisms can differ.
Perpetual futures prop trading allows traders to trade perps within an evaluation or funded-account structure. The account can be simulated even when pricing comes from live perpetual markets.
Yes. Perpetual futures are an emerging part of the prop trading market. Traders can review current Crypto and Perps Prop Firms on Prop Firm Match.
Not necessarily. In PFM Research's review, the core perps prop programs examined used simulated accounts at both evaluation and funded stages. Traders should check each current program before purchasing.
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