Which Type of Settlement Is More Common for Perpetual Futures Contracts? ▴ Learn

Which Type of Settlement Is More Common for Perpetual Futures Contracts?

Perpetual futures contracts, or perpetual swaps, are exclusively cash-settled. Since these contracts have no expiration date, physical delivery is not feasible.

The mechanism used to keep the perpetual contract's price anchored to the underlying spot price is the Funding Rate, which is a periodic payment between long and short traders.

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