Perpetual futures
A futures contract with no expiry date, held in line by the funding rate. Leverage and margin — with liquidation risk on a hard move against you.
Definition
Perpetual futures (a perp) are a futures contract with no expiry date — its price is held close to spot by the funding rate. With leverage comes liquidation risk: a loss can close the position automatically before it ever “comes back to your target”.
Example
You buy BTC-PERP at 5× instead of spot. The price rises and you earn much as you would on spot, but you pay or receive funding and you have to watch your margin. On a violent downward spike you can be liquidated even though “in the long term you believe in BTC”.
Anti-example / common mistake
A perp is not spot. Holding “investment” BTC at 20× “because it is cheaper than buying it” is the classic road to a wipe-out. Ignoring funding on a multi-day hold is the second mistake.