Perpetual futures are derivative contracts with no predetermined expiry date. A derivative is an agreement whose value depends on another asset, here Bitcoin. Price movements and the direction of the position determine its result; the product’s rules specify settlement, collateral requirements and funding.
Petr wants to trade a rise in Bitcoin’s price without managing an approaching futures expiry. He chooses a perpetual, a contract with no fixed maturity. He opens a long, which benefits from a rising price before costs; the opposite short benefits from a fall. While he holds it, the exchange may regularly transfer gains and losses into his account balance. That settlement does not itself close the position. It differs from rolling a dated future: closing an approaching maturity and opening a later one. A perpetual does not require that routine replacement because of expiry. It still does not guarantee that Petr can hold the position for as long as he wishes. [1]
After opening the contract, Petr has price exposure: changes in price affect his financial result. He has not acquired a BTC balance equal to the full position size that he can send to his own wallet. Buying the asset itself belongs to the spot market. Even a contract settled in BTC does not automatically deliver bitcoin equal to the full notional. BTC may simply be the currency used to settle profit or loss and provide collateral. Petr therefore distinguishes what the contract represents, the currency in which its result is calculated, and the funds actually available to him. [1] [2]
Imagine a linear long representing 0.2 BTC. Petr enters at 60,000 and closes the entire position at 63,000 USDC per BTC. Multiplying the price difference by the quantity gives a gain of 600 USDC before funding and fees. USDC is a stablecoin, a token designed to track the US dollar’s value; it is neither bitcoin nor a dollar bank deposit. The position’s opening notional is 12,000 USDC. That is not a premium paid to buy the contract, nor automatically the required margin. “Linear” means that, for a fixed quantity, the result changes directly with the price difference. This is an illustrative model, not a live quote. [2]
On another market, Petr encounters Deribit BTC-PERPETUAL. This is an inverse contract: its contractual size is stated in USD, but margin and results are in BTC. Each contract represents 10 USD. Buying 100 contracts therefore means a contractual size of 1,000 USD, not 100 BTC. Inverse calculations use reciprocal prices, so the previous linear dollar calculation cannot simply be reused. Conversion into the collateral currency changes with price too. Petr first reads the unit and multiplier of the specific contract. A similarly named product on another exchange need not use the same units or calculation. [1]
Petr notices that the last traded price, index and mark are not always identical. The last price comes from an actual trade. The index provides an underlying-price reference using selected markets and rules. Mark price is the exchange’s calculated price, used for purposes such as valuing positions and checking margin; its construction varies by product. To exit, Petr needs an order to execute. Available opposing orders—liquidity—and the order type both matter. A difference from the expected execution price is called slippage. Even an attractive mark does not mean the entire position can be sold at that price. [1] [4]
A dated future settles at maturity under its contract rules. A perpetual lacks that recurring endpoint, so it uses another incentive to keep its price near the underlying: funding payments between long and short positions. At a positive rate, longs pay shorts; at a negative rate, the direction reverses. Funding can change sign, turning today’s income into tomorrow’s cost. The quoted period and the accrual method must be checked in the market’s terms; Deribit, for example, calculates continuously. The mechanism encourages price convergence, but eliminates neither every discrepancy nor uncertainty about future income. Petr includes it in his overall result alongside fees. [3]
Return to the linear long of 0.2 BTC. A fall from 60,000 to 54,000 USDC would produce a loss of 1,200 USDC before costs. Suppose Petr deposited initial margin of 1,200 USDC. This does not mean he can safely wait until that price: maintenance requirements may liquidate earlier. Maintenance margin is the minimum collateral needed to keep the position, and liquidation forcibly closes or reduces it before all funds necessarily run out. Leverage allows greater exposure with less collateral, making the deposited funds more sensitive to price changes. The actual threshold depends on the account, other positions, fees and rules; this model does not determine it. [2] [4]
To leave voluntarily, Petr must do more than submit an order: it must execute and actually reduce or close his position. A limit order controls price but may find no counterparty; a market order does not guarantee the price currently displayed. Beyond margin liquidation, the operator can also delist a product and specify final settlement under its terms, or restrict trading during exceptional conditions. Coinbase International Exchange’s rules explicitly describe such a delisting process. The currently applicable terms of the particular account’s market are what matter. “Perpetual” is not a right to keep a contract open forever. [4]
For the clearest picture, read this entry together with Perpetual funding rate, Bitcoin futures, Forced liquidation, Leverage. The reverse links also lead from Perpetual funding rate, Forced liquidation.