> 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/trading/drift.md).

# Drift

Perpetual options on Everstrike have dynamic strike prices. The strike follows the 100-hour EMA of the underlying asset. When the underlying rises, the strike tends to rise. When the underlying falls, the strike tends to fall.

Drift measures the expected hourly change in a contract's intrinsic value that comes from this strike movement alone.

* If Drift is `5%`, the contract is expected to gain `5%` in intrinsic value per hour from strike movement.
* If Drift is `-5%`, the contract is expected to lose `5%` in intrinsic value per hour from strike movement.

### How to read Drift

Drift isolates one effect only. It tells you how moving strikes affect intrinsic value if all else stays equal.

Use it as an estimate, not a guarantee. Drift is a point-in-time value and can change continuously.

### Example

Suppose a perpetual option shows Drift of `-2%`.

If the underlying asset stays unchanged over the next hour, the contract is still expected to lose `2%` of intrinsic value from strike movement alone. If the underlying asset moves during that hour, that price move can easily outweigh the Drift effect.

### Drift vs. intrinsic value and market value

Drift applies to intrinsic value. It does not directly describe the contract's market price.

On Everstrike:

* [Index Price](/trading/index-price.md) is an indicator of intrinsic value.
* [Mark Price](/trading/mark-price.md) is an indicator of market value.

This matters because intrinsic value and market value can diverge. Drift may point to a change in intrinsic value while the Mark Price moves differently.

### What Drift is useful for

Drift helps you:

* estimate expected intrinsic value gain or loss from strike movement
* compare perpetual options contracts
* build better PnL projections

Do not use Drift on its own. Combine it with [Funding](/trading/funding.md) and your view on the underlying asset.

Underlying price movement usually has a much larger impact on intrinsic value than Drift.

### Drift and Funding

Drift and Funding often move together, but they are not the same thing.

If a contract has negative Drift, traders are often more willing to short it. That pressure can push Funding lower as the market moves toward equilibrium.

In that setup, a holder may lose value from Drift but receive value through hourly funding exchanges. The reverse can also happen when Drift is positive.

Drift and Funding can diverge when the contract trades at a large premium or discount to intrinsic value. In that case:

* Drift reflects strike movement
* Funding reflects the gap between market value and intrinsic value

This divergence is especially common in at-the-money and out-of-the-money options contracts.

It is possible to arbitrage Drift and Funding in some situations. Do not assume they will match exactly. Both are point-in-time estimates and can change quickly.