How Does the Lack of an Expiration Date Affect the Time Decay (Theta) of a Perpetual Contract?

Unlike traditional options or futures, perpetual contracts do not have a fixed expiration date, meaning they do not experience time decay (theta). The value of a perpetual contract is not eroded over time as it is constantly maintained near the spot price by the funding rate mechanism.

This lack of theta is a key advantage, as traders do not have to worry about the time-based erosion of their position's value, simplifying long-term directional speculation.