> For the complete documentation index, see [llms.txt](https://references.everstrike.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://references.everstrike.io/products/perpetual-futures.md).

# Perpetual Futures

Perpetual futures are no-expiration futures that are subject to [Funding](/trading/funding.md). Use them for continuous leveraged delta exposure without choosing an expiration date.

On Everstrike, perpetual futures are priced, margined, and settled in [evUSD](/account/evusd.md). They are [cash-settled](https://www.investopedia.com/terms/c/cashsettlement.asp), 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](/trading/funding.md). 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](https://blog.everstrike.io/perpetual-options-vs-perpetual-futures/) 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](/products/perpetual-options.md).

## 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.