What Is the Difference between a “Perpetual” and a “Fixed-Maturity” Future?
A Fixed-Maturity Future has a specific, predetermined expiration date, after which the contract is settled (either physically or in cash). A Perpetual Future (or Perpetual Swap) has no expiration date and remains open indefinitely as long as the margin is maintained.
The perpetual future uses a funding rate mechanism to keep its price close to the spot price.
Glossar
Funding Rate Mechanism
Mechanism ⎊ Funding Rate Mechanisms within cryptocurrency derivatives represent periodic payments exchanged between traders holding opposing positions in perpetual contracts, designed to anchor the perpetual contract price to the underlying spot market.
No Expiration Date
Perpetuity ⎊ A ‘no expiration date’ construct within cryptocurrency derivatives signifies a contract lacking a predetermined settlement date, fundamentally altering risk profiles compared to traditional fixed-maturity instruments.
Perpetual Futures
Contract ⎊ Perpetual futures represent a type of financial derivative contract, specifically within the cryptocurrency and options trading space, that replicates the payoff of a traditional futures contract without a fixed expiration date.
Perpetual Future
Contract ⎊ This instrument synthetically replicates the economic exposure of a traditional futures contract but is structured to exist indefinitely without a mandatory delivery date.