What is Perpetual Swap?

A perpetual swap, or a perpetual futures contract, is a derivative trading instrument that allows an investor to buy or sell an asset at an unspecified time period in the future. Perpetual swaps are typically cash-settled with no expiry date when an investor opens a position. When opening a position, payments are sometimes exchanged between holders of both sides of the contract (for both longs and shorts) meaning that the direction and amount of the settlement is based on the difference in the underlying asset and the contract price, and also, if relevant, the difference in leverage between both sides.