Definition ∞ Perpetual futures are derivative contracts that allow traders to speculate on the future price of an asset without an expiration date. Unlike traditional futures, these contracts do not have a set settlement date, enabling positions to be held indefinitely. They are a prevalent instrument in cryptocurrency derivatives markets. Their structure involves funding rates to keep the contract price aligned with the spot market.
Context ∞ The current discourse surrounding perpetual futures centers on their widespread use in crypto trading and the associated leverage risks. Debates frequently arise concerning their potential to exacerbate market volatility and the regulatory oversight required for these instruments. A critical future development to monitor is the implementation of enhanced risk management features by exchanges and clearer guidance from regulators regarding their classification.
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