Perpetual futures, or perps, hit $61.7 trillion in trading volume last year and are rapidly expanding beyond crypto into FX, equities, and metals. Brokers are now racing to add the product, but doing so requires new infrastructure for funding rates, mark pricing, and around-the-clock liquidation systems.
Unlike traditional futures, perps have no expiry date. Instead, they use periodic funding payments between longs and shorts to keep contract prices anchored to the underlying index. When perps trade above spot, longs pay shorts, and vice versa. This funding is calculated on notional size, meaning leverage can amplify costs significantly even on small margin posts.
Brokers must also implement mark pricing rather than last-traded pricing to prevent spurious liquidations during volatile or illiquid periods. Margin models include isolated margin for single positions or cross margin for capital efficiency across accounts. Liquidation triggers automatically when maintenance margins are breached, often supported by insurance funds on crypto-native platforms.
FXnCO Insight
Brokers entering perps must build operationally complex 24/7 infrastructure, but the product’s explosive volume growth and cross-asset appeal make it increasingly essential for competitive positioning.
Source: Finance Magnates