Does MTM Apply to Perpetual Swap Contracts in Cryptocurrency?
Yes, MTM is a core feature of cryptocurrency perpetual swap contracts. Although perpetual swaps do not have an expiration date, they use MTM to manage risk.
Instead of daily settlement, the MTM process often occurs more frequently, sometimes every hour. This is achieved through a funding rate mechanism.
The funding rate ensures the perpetual swap price remains close to the spot price.
