Key takeaways
- A perpetual future has no expiry date. The position stays open until you close it or the venue liquidates it.
- Funding payments pass between long and short traders and pull the contract price towards spot. They are a cost or a credit, not income from the venue.
- You post margin, not the full value. In the illustration below, a 5% price fall takes a quarter of the 2,000.00 USD margin, and a 15% fall ends in liquidation.
- The sale of crypto derivatives to UK retail clients has been prohibited since 6 January 2021, and Backpack's Dubai licence does not cover futures.
- Backpack listed 103 perpetual markets on 6 October 2026. Its tier 1 fees are 0.02% for makers and 0.05% for takers.
For information only. Not investment advice. This guide explains how a product works and does not tell you whether to trade it. Read the risk disclosure for derivatives first.
Perpetual futures in one paragraph
A perpetual future is a contract that pays or charges you the change in an asset's price and has no date on which it ends. You never hold the asset. You post collateral, called margin, worth a fraction of the position, and profit or loss is added to or taken from that margin as the price moves. Because no expiry date pulls the contract back to the market price, traders on the two sides exchange a funding payment at set intervals. The European Securities and Markets Authority (ESMA) describes perpetual futures in its guidelines of 19 March 2025 as derivatives that "do not have an expiration or settlement date".
The idea was first proposed in 1993 by the economist Robert Shiller, and an academic study last revised in September 2026 calls perpetual futures the most popular derivative in crypto markets. This guide is one of the Backpack Learn guides and explains the mechanics with round numbers.
How perpetual futures differ from spot and from dated futures
Spot trading gives you the asset. A dated future gives you a contract that settles on a set day. A perpetual future gives you a contract with no settlement day at all. The table sets the three side by side.
| Feature | Spot | Dated future | Perpetual future |
|---|---|---|---|
| What you hold | The asset itself, which you can withdraw or transfer | A contract on the asset's price | A contract on the asset's price |
| Expiry | None | A set date. To stay in the trade you move to a later contract | None. Open until you close it or it is liquidated |
| Funding payments | None | None. The gap to spot closes as expiry approaches | Paid between long and short traders at set intervals |
| Margin | None when you pay in full | Initial and maintenance margin | Initial and maintenance margin |
| Typical use | Buying, holding and transferring an asset | Hedging or trading to a known date | Hedging or trading a price with no date to manage |
| Most you can lose | The amount you paid | The margin you posted. Whether you can owe more depends on the venue and on local rules | |
Perpetual futures vs futures. A dated future settles against the market price on its expiry day, so its price is drawn to spot as that day approaches. A perpetual future has no such day. Funding payments do the work that expiry does, and they do it imperfectly: the study cited above notes that nothing forces a perpetual to meet the spot price at any given moment.
Perpetual futures vs spot. With spot you own something you can withdraw, and the most you can lose is what you paid. With a perpetual future you own only the contract, a short position is as easy to open as a long one, and a modest price move can remove your margin.
How perpetual futures work: four moving parts
Four things govern every perpetual futures position: the mark price, funding payments, margin and liquidation. Each has a one-sentence definition in the glossary entries for funding rate and maintenance margin.
Mark price
The mark price is the reference price a venue uses to value open positions, and it is not the last traded price. It is usually built from spot prices on several markets, so that one unusual trade on the venue's own order book cannot set off liquidations by itself. Unrealised profit and loss, margin checks and liquidation all follow the mark price. The last traded price is only what the most recent buyer and seller agreed, and the two can differ in a fast market.
Funding payments
Funding is a payment between traders that pulls the contract price towards the spot price. When the perpetual trades above spot, traders with long positions pay those with short positions. When it trades below spot, the payment runs the other way. Holding the crowded side becomes costly, which draws traders to the other side and narrows the gap. Funding is a cost or a credit between traders. It is not income paid by the venue. Intervals vary by venue, and the study cited above describes eight hours as typical. The interval Backpack uses is not stated in the sources read for this guide.
Margin
Margin is the collateral you post to open a position and keep it open. Initial margin is the amount needed to open, set as a share of the position's value. Maintenance margin is the lower amount that must remain while the position is open. Losses, fees and funding you pay are all taken from your margin. The smaller the margin relative to the position, the higher the leverage and the smaller the price move that uses the margin up. Venues let margin be assigned to one position (isolated margin), shared across positions (cross margin) or calculated on the whole account (portfolio margin).
Liquidation
Liquidation is the forced closing of a position once the margin left falls below the maintenance margin. The venue takes over the position and closes it at the prices available, which in a fast market can be worse than the mark price that triggered it. You lose the margin that supported the position, less whatever remains after it is closed, and a liquidation fee may apply. Crypto markets do not close, so it can happen at any hour. Whether you can owe more than the margin you posted depends on the venue's rules and on the protections where you live. The liquidation price is the level at which this happens.
A perpetual futures example, from open to close
One long position, followed from entry to exit, shows how the four parts meet. The numbers are round and invented for the arithmetic. Only the 0.05% taker fee is a published Backpack tier 1 rate.
Illustration only, not a forecast
A trader opens a long position of 200 units of a fictional token at 50.00 USD, so the position is worth 10,000.00 USD. The trader posts 2,000.00 USD of margin, which is 20% of the position. To keep the sums simple, the maintenance margin stays at 500.00 USD. Funding is charged twice at an invented rate of 0.01% of the position value, and the long side pays.
| Step | What happens | Change | Margin left |
|---|---|---|---|
| Start | Margin posted for a 10,000.00 position | +2,000.00 | 2,000.00 |
| 1. Open | Taker fee of 0.05% on 10,000.00 | -5.00 | 1,995.00 |
| 2. Funding | 0.01% of 10,000.00, paid by the long side | -1.00 | 1,994.00 |
| 3. Funding | 0.01% of 10,000.00, paid by the long side | -1.00 | 1,993.00 |
| 4. Price falls 5% | Mark price moves from 50.00 to 47.50 on 200 units | -500.00 | 1,493.00 |
| 5. Close | Taker fee of 0.05% on 9,500.00 | -4.75 | 1,488.25 |
The trader gets back 1,488.25 USD of the 2,000.00 USD posted. The loss is 511.75 USD: 500.00 USD from the price, 9.75 USD in fees and 2.00 USD in funding. A 5% fall in the price has cost 25.6% of the margin.
The same position in a rising market. Had the price risen 5% to 52.50 USD, the position would have gained 500.00 USD. After 10.25 USD in fees and 2.00 USD in funding, the trader would have ended with 2,487.75 USD, a gain of 487.75 USD. Costs reduce a gain and add to a loss.
A larger fall. At 42.50 USD, a 15% fall, the loss from the price would be 1,500.00 USD and the margin left 493.00 USD. That is below the 500.00 USD maintenance margin, so the venue would already have liquidated the position.
A 5% fall in the price cost a quarter of the margin. A 15% fall ended the position.
How to trade perpetual futures: six checks before a first order
Before a first order, six checks matter more than the order ticket: who offers the product to you, the contract terms, the position size, the margin mode, the order type and what to watch afterwards. It is a checklist, not advice and not a suggestion to trade.
- Check that the product is offered to you, and by which company. Availability depends on where you live and on how the firm classifies you. Find the legal entity, its regulator and its licence number before you fund an account: for Backpack, see the companies behind Backpack and their licences.
- Read the contract details. Each market has its own minimum order size, margin requirements and funding terms. Read them on the venue's contract page, not in a summary.
- Size the position by the loss you can accept, not by the leverage offered. Decide the amount you are prepared to lose, then work back to a position size and a margin amount. The highest leverage a venue shows is a limit, not a target.
- Choose how margin is shared. A position with its own margin can lose only that margin, while positions that share margin can draw on the rest of the account. Know which setting applies before the order is sent.
- Choose the order type. A limit order names the worst price you will accept and may not fill, while a market order fills at once at the prices available. A stop order closes the position at a chosen price, though in a fast market it can fill at a worse one.
- Watch funding and margin while the position is open. Funding is charged or credited at every interval while you hold the position. Compare the margin left with the maintenance margin, above all before weekends and scheduled announcements.
What perpetual futures cost
A perpetual futures trade has three costs: the trading fee, funding and the spread. Only the first can be read in advance.
Trading fees. A maker fee applies when your order rests on the order book until another trader fills it, and a taker fee when your order fills against one already there. At tier 1, the entry tier, Backpack charges 0.02% for makers and 0.05% for takers on perpetual futures, according to its trading fees article, which is marked as subject to change. On a 10,000.00 USD position that is 2.00 USD as a maker or 5.00 USD as a taker, charged on the full position when you open and again when you close. The fee schedule lists the maker and taker fee tiers above tier 1.
Funding. Funding is a cost when you are on the paying side and a credit when you are not. The rate changes from one interval to the next, so the total depends on how long you hold the position.
Spread. The spread is the gap between the highest buy price and the lowest sell price on the order book. A market order pays it at once, and a large order in a thin market can fill at several prices, each worse than the last.
The risks you take on
The main risk is losing all the margin you post, and it can happen within minutes. When ESMA restricted contracts for difference, a comparable leveraged product, in 2018, studies by national regulators showed that 74% to 89% of retail accounts lost money on them.
- Liquidation. The venue closes the position when the margin left falls below the maintenance margin. You cannot wait for the price to recover.
- Rapid loss of margin. Leverage multiplies losses as well as gains. In the example above, a 5% fall took a quarter of the margin.
- Funding costs over time. A position on the paying side loses margin at every interval, even when the price does not move.
- Gaps. In a volatile market the price can jump past a stop order or the liquidation level, and the position is closed at the next price available.
- Venue risk. Your margin is held by the venue. If the venue fails, is hacked or halts withdrawals, you may not get it back. One check is described in the guide on how to check that an exchange holds client assets.
The full risk disclosure for derivatives covers each of these.
Where perpetual futures are restricted
Perpetual futures are not offered to everyone, and the rules depend on where you live. In the UK, the sale of crypto derivatives to retail clients has been prohibited since 6 January 2021 under FCA Policy Statement PS20/10. In Dubai, Backpack's licence covers spot trading only: its licence disclosure says the licence "does not cover Futures or Margin Trading", so the product is not available in the UAE. In the EU, Backpack provides perpetual futures through Trek Labs Europe Ltd, licensed by CySEC as a Cyprus Investment Firm, licence no. 273/15. The table by region is on the page for perpetual futures markets and availability on Backpack.
Who perpetual futures suit, and who should avoid them
Perpetual futures suit people who already understand margin and can watch a position. They do not suit a first purchase of crypto.
They can suit a holder who wants to hedge an asset for a short period: a short perpetual position gains when the asset falls, at the price of fees and funding. They can also suit experienced traders who size positions by the loss they accept and can follow a market that never closes.
They do not suit first-time buyers, anyone who cannot afford to lose the margin, or anyone trading with borrowed money or money needed for bills. They are also the wrong tool for owning an asset: a perpetual cannot be withdrawn or transferred. If you want to own a share and not only trade its price, the guide on how tokenized stocks differ from equity perpetuals covers the alternatives.
Common mistakes
Five mistakes are easy to make with a first perpetual futures position, and each can be avoided before the order is sent.
- Ignoring funding. Funding is a holding cost. Check the current rate and its direction before keeping a position open for days.
- Sizing by leverage instead of loss. The highest leverage on offer produces a position that a small move can close. Start from the loss you accept.
- Confusing an equity perpetual with a share. A contract such as NVDA-PERP tracks a share price. It carries no shareholder rights, and there is nothing to transfer to a broker.
- Cross-margin contagion. When positions share margin, one losing position can use up the margin that supports the others, and the whole account can be liquidated.
- Trading around illiquid hours. When few orders rest on the book, spreads widen and prices move further on small trades. For an equity perpetual that includes the hours when the underlying stock market is closed.
Perpetual futures on Backpack: markets, costs and provider
Backpack listed 103 perpetual futures markets on 6 October 2026, out of 190 market pages in its trade sitemap. The other 87 were spot markets. The facts below were read from Backpack's own pages and from regulator registers on the dates shown.
| Fact | Value | Source and date read |
|---|---|---|
| Perpetual markets listed | 103 | Trade sitemap, |
| Equity perpetuals named | NVDA-PERP, TSLA-PERP, AAPL-PERP, SPY-PERP, QQQ-PERP | Markets page, |
| Tier 1 maker and taker fees | 0.02%, 0.05% | Trading fees article, |
| Provider in the EU | Trek Labs Europe Ltd, trade name Backpack EU, CySEC licence no. 273/15 | CySEC register, |
| Dubai and the UAE | Not offered: the licence covers spot trading only | Backpack's VARA licence disclosure, |
The CySEC register entry for Trek Labs Europe Ltd dates the licence 23 April 2015 and lists eu.backpack.exchange as the approved domain. The sources read name no provider for regions outside the EU. They also do not state the mark price method, the margin tiers or the liquidation rules that Backpack applies, so this guide gives no figures for them. Who stands behind each product is set out with the companies behind Backpack and their licences.
Check the markets and who provides them where you live
The product page lists the markets, the tier 1 fees and, region by region, the company and licence behind perpetual futures on Backpack, including where they are not offered.
Frequently asked questions
What is a perpetual future in simple terms?
A perpetual future is a contract that tracks the price of an asset and has no end date. You do not own the asset. You post collateral called margin, and your account gains or loses as the price moves. Payments between traders, called funding, keep the contract price close to the market price. If your margin runs too low, the venue closes the position.
Do perpetual futures expire?
No. A perpetual future has no expiry or settlement date, which is what separates it from a dated future. The position stays open until you close it or the venue liquidates it because the margin left has fallen below the maintenance margin. A venue can also remove a market from its list, and its rules then say how open positions are settled.
Why does a perpetual future trade close to the spot price?
Because of funding. When the contract trades above the spot price, traders with long positions pay those with short positions, and when it trades below, the payment reverses. That makes the crowded side costly to hold and attracts traders to the other side, which narrows the gap. Nothing forces the two prices to meet, so the gap can widen sharply in a stressed market.
What is the main risk of perpetual futures?
The main risk is liquidation: losing the margin you posted because the price moved against you before you could react. Leverage turns a small price move into a large loss relative to your margin, and the venue closes the position, not you. Funding costs, price gaps in volatile markets and the failure of the venue itself are further risks.
Are perpetual futures the same as CFDs?
Not in name, but they are close in substance: both are leveraged contracts on a price, settled in cash, with no ownership of the asset. On 24 February 2026 ESMA said that derivatives marketed as perpetual futures are likely to fall within the national restrictions on contracts for difference for retail clients in the EU, whatever name a firm gives them.
Sources
- He, Manela, Ross and von Wachter, Fundamentals of Perpetual Futures, arXiv:2212.06888, version 7 of 17 September 2026, accessed 12 October 2026.
- ESMA, Guidelines on the conditions and criteria for the qualification of crypto-assets as financial instruments, ESMA75453128700-1323, 19 March 2025, paragraph 47, accessed 12 October 2026.
- ESMA, ESMA reminds firms of their obligations under CFD product intervention measures amid rising offerings of perpetual futures, public statement ESMA35-243228190-8024, 24 February 2026, accessed 12 October 2026.
- ESMA, ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, 27 March 2018, accessed 12 October 2026.
- Financial Conduct Authority, PS20/10: Prohibiting the sale to retail clients of investment products that reference cryptoassets, first published 6 October 2020, accessed 12 October 2026.
- Cyprus Securities and Exchange Commission, register entry for Trek Labs Europe Ltd, accessed 12 October 2026.
- Backpack, VARA License Information, support site, accessed 12 October 2026.
- Backpack, Trading Fees, support site, accessed 12 October 2026.