> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tradealpha.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Perpetual Futures

> A perpetual future is a contract that tracks an asset's price with no expiry date. It lets you go long or short with leverage without owning the asset. Here is how it compares to buying stock or trading options.

Imagine you and a friend each bet on where a stock goes tomorrow. You think up, they think down. You do not need to buy any shares; you just settle the difference at the end. A perpetual future is that bet, except it is open to everyone, it never has to end, and you can size it with leverage. If the stock goes up 2%, your position goes up 2% times your leverage. If it goes down 2%, the same in reverse.

A **perpetual future** (a "perp") is a contract whose price follows an underlying asset: a stock, an index, a commodity, or a crypto asset. You never own the asset. You hold a position whose value rises and falls with it.

Two things make perps different from traditional futures:

* **No expiry.** You hold the position as long as you want, provided your margin holds up.
* **Leverage fee.** An hourly payment between longs and shorts (called the funding rate elsewhere) keeps the contract price tied to the real price. See [Leverage fee](/faq/funding-rates).

## Perps vs. buying the stock

| | Buying shares | Perp on Alpha |
| - | - | - |
| Do you own the asset? | Yes | No |
| Dividends and voting rights | Yes | No |
| Leverage | Limited, requires a margin account | Up to 50x, set per trade |
| Going short | Requires borrowing shares, pays borrow fees | One tap, no borrow |
| Trading hours | Exchange hours only | 24/7 |
| Ongoing cost | None | Hourly leverage fee, usually small |
| Max loss | Your full investment | The margin on that position |

## Perps vs. options

| | Options | Perp on Alpha |
| - | - | - |
| Direction | Calls (up) or puts (down) | Long (up) or short (down) |
| Expiry | Always | Never |
| Time decay | Yes, value erodes daily | No |
| Pricing | Strike, expiry, implied volatility, the Greeks | The asset's price |
| Leverage | Built into the premium, hard to control | Explicit, you choose it |
| Max loss | Premium paid (for buyers) | The margin on that position |
| Best for | Defined-risk bets on a specific date or on volatility itself | Simple directional bets, held as long as your view holds |

If you have ever wanted to bet on a stock going up or down with leverage, without learning the Greeks or worrying about expiry, perps are the simpler tool.

## How your PnL works

Your profit or loss moves one-to-one with the asset, multiplied by your leverage.

* Long \$1,000 of a stock at 10x (using \$100 of margin). The stock rises 3%. Your position gains \$30, a 30% return on your margin.
* Same trade, the stock falls 3%. Your position loses \$30. Fall 10% and your margin is gone; the position is liquidated before that.

See [Liquidations](/faq/liquidations) for exactly how that limit works.

## Does the perp price match the real price?

Closely, but not always exactly. The perp price is set by buyers and sellers of the contract; the real price is set on the underlying market. The leverage fee pulls them together every hour. Gaps are usually a fraction of a percent and are largest during fast moves or when the underlying market is closed and the perp is still trading.

## Why trade perps

* **Leverage you control**, from 1x to 50x, chosen per trade
* **Short as easily as you go long**
* **Trade 24/7**, including when the underlying exchange is closed
* **No expiry** to manage
* **Isolated risk**: the most you can lose is the margin on that position


This documentation is built and hosted on [Mintlify](https://mintlify.com), a developer documentation platform.