What does perpetual contract mean?

The absence of a predefined expiration date allows perpetual contracts to be held indefinitely, without the requirement for extensions or renewals.

Both long and short position holders in perpetual contracts are obligated to make periodic payments. The direction and magnitude of these payments hinge on the discrepancy between the contract price and the price of the underlying asset. In some instances, the difference in leverage between the parties may also influence these payments.

A perpetual futures contract, alternatively referred to as a perpetual contract, represents a commitment to purchase or sell an asset at a specified future point in time.

Unlike traditional futures contracts, perpetual contracts do not possess an expiration date. This distinctive characteristic differentiates them from ordinary futures.

Settlements for perpetual contracts are conducted in cash, eliminating the necessity for physical delivery of the underlying asset.