Perpetual Futures

Perpetual futures provide indefinite leveraged delta exposure to a specific asset.

Perpetual futures are no-expiration futures that are subject to Funding. Use them for continuous leveraged delta exposure without choosing an expiration date.

On Everstrike, perpetual futures are priced, margined, and settled in evUSD. They are cash-settled, so no physical delivery of the underlying asset takes place.

Specification

Settlement	Cash
Expiration	Perpetual
Pricing Currency	evUSD
Margin Currency	evUSD
Settlement Currency	evUSD
Funding	Hourly
Funding Interval	1h
Max Funding Rate	0.3%
Funding Period	10h

Notes:

• Funding is exchanged during the first five seconds of each hour.

• Trading is disabled during the first ten seconds of each hour.

• The hourly funding rate is capped at 0.3%.

Funding

Funding-based derivatives are subject to Funding. Funding is an hourly exchange of money between longs and shorts.

• Positive funding rate: longs pay shorts.

• Negative funding rate: shorts pay longs.

Funding (Long) = -Funding Rate * Position Size (USD)

Funding (Short) = Funding Rate * Position Size (USD)

Funding takes place during the first five seconds of each hour. During this time, Everstrike takes a snapshot of open positions and debits or credits each trader's margin balance according to the formulas above.

Funding rate

First calculate the premium:

Premium = ((Mark Price - Index Price) / Index Price)

Where:

• Mark Price is the current trading price of the perpetual future.

• Index Price is the spot reference price of the underlying asset.

• Premium is the relative difference between the two.

Next calculate the base funding rate:

Base Funding Rate = Max(dampener, Premium) + Min(dampener, Premium)

For perpetual futures, dampener = 0.03.

Finally, calculate the funding rate:

Funding Rate = Base Funding Rate * (Funding Interval/Funding Period)

Funding period

The Funding Period on Everstrike is 10 hours.

Funding interval

The Funding Interval on Everstrike is 1 hour.

Settlement

Perpetual futures are cash-settled. When you close a position, Everstrike realizes the position P/L and credits it to your cash balance. This happens automatically, usually within one second.

Expiration

Perpetual futures do not expire.

Equivalence with perpetual options

A perpetual futures contract is functionally equivalent to a perpetual call option with strike price zero. They share the same payoff function. Funding for perpetual futures works in the same way as funding for perpetual options.

Example 1

A trader opens a long BTC perpetual futures position when the contract trades at $23,000.

One month later, the contract trades at $24,000. The trader has paid a total of $100 in funding.

If the trader closes the position now, the net P/L is:

$24,000 - $23,000 - $100 = $900

This amount is credited to the trader's cash balance on close.

Example 2

A trader opens a long BTC perpetual futures position when the contract trades at $23,000.

One month later, the contract trades at $22,800. The trader has received a total of $500 in funding.

If the trader closes the position now, the net P/L is:

$22,800 - $23,000 + $500 = $300

This amount is credited to the trader's cash balance on close.