How Can a Perpetual Futures Contract Be Used Synthetically to Replicate a Leveraged Spot Position?

A trader can open a perpetual futures position with only a fraction of the total contract value as margin, effectively borrowing funds to gain leveraged exposure to the underlying asset's price movements. A long perpetual position replicates a leveraged long spot position.

The funding rate then acts as the periodic interest payment or receipt on the notional "borrowed" amount.