What Are Equity Perpetual Futures?

Key Takeaways

• An equity perpetual future is a derivative contract that tracks the price of a listed stock or equity index with no expiration date. The holder owns no shares and receives no dividends or voting rights.
• Perpetual contracts use a periodic funding rate, rather than settlement at expiry, to stay aligned with the underlying spot price, according to the US Commodity Futures Trading Commission.
• Equity perps trade continuously, including nights and weekends when US stock exchanges are closed. That is the main reason traders outside US time zones use them, and the main source of their risk.
• Monthly equity perpetual volume on centralized crypto exchanges rose from roughly $15 billion in April 2026 to close to $250 billion in July 2026, according to CryptoQuant data.

What is an equity perpetual future?

An equity perpetual future is a derivative contract that tracks the price of a listed stock or equity index without an expiration date and without transferring ownership of the underlying shares. Traders post collateral, open a long or short position, and hold it indefinitely. A periodic funding payment between longs and shorts keeps the contract price anchored to the reference stock price. Equity perps are also called stock perpetual futures, or stock perps.

The design comes from crypto markets, where perpetual contracts have been the dominant derivative structure for years, and was applied to equities from early 2026. What carries over is the absence of expiry and the funding mechanism. What changes is the underlying: a stock market that closes at night and on weekends, sitting beneath a contract that never does.

How does an equity perpetual future work?

A trader deposits collateral, usually a stablecoin or cash balance, and opens a position larger than that collateral using leverage. Profit and loss accrues continuously against a reference price rather than settling on a fixed date. Three prices do the work:

• Index price. The venue's estimate of what the stock is actually worth, built from equity market data while the exchange is open.
• Mark price. The price used for margin, unrealized profit and loss, and liquidation. It is deliberately not the last traded price, so that a single trade in a thin order book cannot by itself trigger liquidations.
• Funding rate. The periodic payment between longs and shorts that replaces expiry.

The complication specific to equity perps is that the stock market closes and the contract does not, so venues run two regimes. In-session, prices come from the outside world. Off-session, the external feed stops updating, the reference price generally freezes at the last close, and the venue prices from its own order book or from perpetual prices on other venues, usually within a fixed band around that frozen close. These methodologies differ substantially between venues and are published in each contract's specifications, which is worth reading before trading a specific market.

What is a funding rate on an equity perp?

A funding rate is the periodic payment exchanged between long and short position holders that keeps an equity perp priced near the underlying stock. It is not a fee paid to the exchange. It moves between traders, and its sign flips with market positioning.

The CFTC's June 2026 policy statement on perpetual contracts explains the logic directly: a perpetual has no fixed expiration through which it can converge on spot, so it needs a substitute mechanism to maintain price parity. Funding is that substitute. When the perp trades persistently above the index, longs pay shorts. When it trades below, shorts pay longs.

Intervals vary by venue, commonly hourly or every eight hours. Two consequences follow. A position held through many intervals accumulates funding cost or income that can matter more than the price move itself. And persistent positive funding signals crowded long positioning, which is information in its own right.

One quirk applies to equity perps specifically. US stock markets close, but funding does not. Anyone holding through a Friday close should know how their venue treats funding while the cash market is shut, since the index the contract is converging on is no longer being validated by a live market.

How are equity perps different from crypto perps?

Mechanically they are the same instrument. Anyone who has traded a BTC perpetual already understands the structure. Everything that makes equity perps their own product comes from one fact: the underlying market closes.

The practical consequence is that risk is not evenly distributed across the week. A crypto perp carries roughly the same risk on a Saturday as on a Tuesday. An equity perp does not.

What happens to an equity perp when the stock market is closed?

The contract keeps trading, and for most traders that is the entire point. What happens inside the off-session band is genuine price discovery, just conducted by a smaller set of participants than during the session.

That window is also when a good deal of the information arrives. Earnings are released after the bell. Policy and geopolitical news does not wait for New York to open. A US-listed semiconductor name can move on a supplier's results reported during Asian hours. For anyone trading from Asia or Europe, off-session hours are simply working hours, and an equity perp is the instrument that lets them act then rather than queue an order for the next open.

The tradeoff is that liquidity is thinner and the price can drift from where the stock actually reopens. Analysis of June 2026 data found spreads between the same equity perp on different venues, including a gap on SK Hynix contracts that widened to as much as 2.3%. Position sizing over a weekend deserves more care than the same position mid-week.

What are the risks of trading equity perps?

The risks are the standard leveraged-derivatives set, sharpened by the fact that the underlying market closes and the contract does not.

• Liquidation. On a 10x position, a 10% adverse move wipes out the margin. The SEC's guidance on margin accounts states plainly that an investor may lose more than the amount initially invested.
• Funding drag. A correctly directional position can still lose money if funding runs against it for long enough.
• Gap risk. A stock that reopens at a very different price after earnings or overnight news drags the perp with it, and there is no way to exit at the closed-market price.
• Corporate action risk. Stock splits, mergers, and delistings affect the underlying, and venues handle them differently. Check the policy before holding through a scheduled corporate action.
• Venue risk. Margin, liquidation, and index methodologies differ substantially between platforms and are not standardized the way cleared futures are.