TL;DR — Futures come in two shapes: dated futures that expire on a set date and must be rolled, and perpetuals that never expire and stay anchored by a periodic funding payment instead. If you know perpetuals, you probably know them from crypto. A single-stock perpetual works the same way as a crypto perp — no expiry, funding-anchored — but it tracks one company's stock, so it is typically cash-settled rather than delivering shares and carries overnight gap risk, because the stock market, unlike crypto, does not trade around the clock.
What a perpetual futures contract is
A perpetual futures contract is a derivative: its value is derived from the price of something else, and you can hold a long or short position on that price with leverage. The word “perpetual” points to the one feature that sets it apart from a standard futures contract — it has no expiration date. That single property is why the contract became a popular way to take continuous, leveraged exposure to a price without owning the asset, and most traders who know perpetuals know them from crypto. (For a full primer on the instrument itself, see what perpetual futures for stocks are.)
The useful way to place a single-stock perpetual is against the two kinds of futures you may already know: the traditional dated futures contract, and the crypto perpetual. The contract mechanics it shares with each are identical. What's different is what it tracks and when that market is open.
Dated futures vs. perpetuals — the two shapes of the contract
A traditional, dated futures contract is a promise tied to a specific settlement date. As that date approaches, the contract converges to the spot price and then expires; a trader who wants to keep the position has to close it and reopen a later-dated contract, a process called rolling. Rolling has a cost and has to be managed on a schedule. An option behaves similarly in one respect — it also expires and decays toward a date (see options vs perpetual futures).
A perpetual removes the date entirely. There is no convergence to an expiry and no roll. Instead of a settlement date, it uses a funding payment to stay tied to the market. That is the whole difference between the two shapes: a dated future is built around an expiry and a roll; a perpetual is built around funding and continues indefinitely. You hold a perpetual for as long as your thesis and your margin allow, not until the calendar forces you out.
The funding rate — how a perpetual stays tied to the market
Because a perpetual never expires, it needs another mechanism to keep its price anchored to the thing it tracks. That mechanism is the funding rate: a small periodic payment exchanged directly between traders holding long positions and traders holding short positions. When the contract trades above the reference price, longs pay shorts, which nudges the contract back down; when it trades below, shorts pay longs, nudging it up. Funding is not a fee paid to a venue — it is a balancing transfer between the two sides of the market that keeps the contract price aligned with the live reference price. It is the ongoing cost a perpetual holder budgets for, in place of the expiry-and-roll cycle of a dated future. This works the same on a single-stock perpetual as it does on a crypto perpetual.
Margin and liquidation — isolated vs. cross
A perpetual is a leveraged product, so it is opened against margin rather than paid for in full. There are typically two margin modes. In isolated margin, only the margin assigned to a specific position is at risk on that position, so a loss is contained to what you posted there. In cross margin, the whole account balance backs the position, which lowers the chance of liquidation but exposes more of the account if the trade goes wrong. Every leveraged position has a liquidation price — the price at which the position no longer has enough margin to stay open and is automatically closed. Understanding where that price sits, and which margin mode you are in, matters more on a perpetual than almost anything else, because leverage amplifies both gains and losses (see options vs leverage for how that compares to an options position).
What's different when the perpetual tracks a stock
The mechanics above are identical whether the perpetual tracks a crypto asset or a stock. A single-stock perpetual differs from the crypto perpetuals most traders have already met — and from dated futures — in three concrete ways.
First, the reference price. A single-stock perpetual references the live price of a specific stock, so its value moves with that company's price action, news, and earnings — not with a crypto asset or a broad index.
Second, settlement. Settlement is usually in cash rather than in delivered shares — though this depends on the specific venue or protocol. On a cash-settled contract, closing the position credits or debits the cash difference rather than transferring stock, which is part of why there is no borrow or locate step the way there is in short selling.
Third, and most important, market hours and gap risk. A stock trades on an exchange with set hours and is not open continuously the way a crypto market is. A perpetual that tracks that stock therefore inherits overnight gap risk: the stock's price can move sharply between sessions on news released while the exchange is closed, and the contract reflects that gap when trading resumes. A crypto perpetual rarely faces the same closed-then-reopened jump, because its market doesn't close. For an equity trader, this is the practical difference that matters most: the leverage and the funding behave exactly as they do in crypto, but the position sits on top of a market that closes, so gap risk is a first-class consideration.
Side-by-side: dated futures vs. crypto perpetuals vs. single-stock perpetuals
| Feature | Dated futures | Crypto perpetuals | Single-stock perpetual futures |
|---|---|---|---|
| Expiration | Fixed expiry; must be rolled | None (perpetual) | None (perpetual) |
| What it references | An asset or index, for a set date | A crypto asset's price | The live price of a specific stock |
| Price anchor | Converges to spot at expiry | Periodic funding payment | Periodic funding payment |
| Ongoing cost | Roll cost at each expiry | Funding payment | Funding payment |
| Market hours | Set exchange hours | Trades 24/7 | Trades 24/7 |
| Settlement | Cash or physical delivery, by contract | Usually cash | Usually cash, not delivered shares |
| Gap risk | Yes, between sessions | Minimal — market never closes | Overnight / weekend gap risk when the exchange is closed |
| Leverage | Yes — amplifies gains and losses | Yes — amplifies gains and losses | Yes — amplifies gains and losses |
What it means for a retail trader
If you already know one kind of futures, you mostly know this one. From a dated future, the thing you drop is the expiry and the roll; from a crypto perpetual, the things you add are a single-company reference price, cash settlement, and gap risk over closed sessions. The mechanic for opening and managing the position — direction, size, margin mode, funding, liquidation price — is the same in all three. What changes is what you watch while you hold it. None of this removes the core risk: leverage amplifies losses as well as gains, and a perpetual can be liquidated.
Key terms
Dated (traditional) futures — a futures contract with a fixed settlement date that must be rolled into a later contract to maintain the position.
Funding rate — a periodic payment exchanged between long and short holders of a perpetual that keeps the contract price aligned with the reference price.
Mark price — the reference price a venue uses to value open positions and calculate liquidations, rather than the last traded price alone.
Liquidation price — the price at which a leveraged position no longer has enough margin to stay open and is closed automatically.
Isolated margin — a mode in which only the margin assigned to a position is at risk on that position.
Gap risk — the risk that a stock's price jumps between trading sessions, so a position reprices sharply when the market reopens.
Sources
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FAQ
- What are stock perpetual futures?
- In short, they are leveraged contracts that track a stock's price with no expiration date, kept in line by a periodic funding payment — the full primer is at /insights/what-are-perpetual-futures-stocks. This article focuses on how they compare to the futures you may already know: dated futures that expire, and the crypto perpetuals most traders met first.
- Do perpetual futures expire like regular futures?
- No. A dated futures contract expires on a set date and must be rolled to keep the position open. A perpetual — whether on crypto or a stock — has no expiry and uses a funding payment instead, so there is nothing to roll.
- How are stock perps different from crypto perps?
- The contract mechanic is the same — leverage, no expiry, funding-anchored price. The difference is what it tracks: a single-stock perpetual references a specific stock, is usually cash-settled rather than delivering shares, and carries overnight gap risk because the stock's exchange has set hours, while a crypto market trades continuously.
- How do stock perps work?
- You open a leveraged long or short position against margin, the position has no expiry, and a funding payment between longs and shorts keeps the contract price tied to the stock's price. The position can be liquidated if the stock's price moves against it far enough to exhaust your margin.
- What is gap risk on a stock perpetual?
- Gap risk is the risk that the stock's price moves sharply while its exchange is closed — for example on overnight news or over a weekend — so the perpetual reprices when trading resumes. It is more relevant for stock perpetuals than for crypto perpetuals, whose market trades around the clock.
- Are stock perpetuals settled in shares?
- Usually not — most single-stock perpetuals are cash-settled, meaning closing the position credits or debits the cash difference rather than delivering shares. Settlement design can vary by venue or protocol, so confirm how a specific contract settles.
Sources
- A perpetual futures contract has no expiration date, unlike standard (dated) futures that settle on a set date. — Investopedia — Perpetual Futures (accessed 6/26/2026)
- A funding rate is a periodic payment between long and short holders that keeps a perpetual's price aligned with the reference price. — Investopedia — Perpetual Futures (accessed 6/26/2026)
- Standard futures contracts expire on a set date and must be rolled to maintain exposure. — CME Group — Futures basics (accessed 6/26/2026)
