What Are Stock Perpetual Futures? A Guide to Equity Perps
Stock perpetual futures, often called equity perps, are derivative contracts designed to provide price exposure to stocks or equity-related reference markets without a conventional expiry date.
How stock perpetual futures work
A perpetual contract is a derivative rather than a direct share purchase. Traders can generally take long or short positions. A funding mechanism helps keep the contract price aligned with its reference market, while margin and liquidation rules manage leveraged exposure.
Perpetual futures versus owning shares
Owning a share may provide legal shareholder rights depending on the security and custody structure. A perpetual contract instead provides derivative exposure under its contract terms. It does not automatically grant voting rights, dividends or ownership of the referenced company.
Why traders use equity perps
Equity perps can offer directional exposure, shorting and access outside traditional exchange hours where supported. They can also be used for hedging, but basis risk, funding, liquidity and leverage must be considered.
Key risks
Perpetual futures involve leverage, margin calls or liquidation, funding costs, price gaps, liquidity risk, oracle or index risk, platform risk and jurisdictional restrictions. Understand the product documentation before trading.
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Frequently Asked Questions
Do stock perps expire?
Perpetual contracts are designed without a conventional fixed expiry date, although platform rules and market status still apply.
Are stock perps the same as tokenized stocks?
No. A tokenized stock is a token designed to represent specified economic exposure to a security under its terms. A perpetual is a derivative contract with its own margin and funding mechanics.
Can equity perps be shorted?
Many perpetual markets support both long and short positions, subject to the specific market's rules and availability.
What is funding in a perpetual contract?
Funding is a periodic payment mechanism between long and short positions, designed to help keep the perpetual contract price aligned with its reference market.
Can I lose more than I deposit?
This depends on the platform's margin and account rules. Liquidation can cause loss of allocated margin; read the applicable risk disclosures and account protections carefully.