A perpetual swap is a type of derivative contract that allows traders to speculate on the price of an asset without owning it directly. Unlike traditional futures, perpetual swaps do not have an expiration date, meaning traders can hold their positions indefinitely.These contracts often include a mechanism called funding rates, which is a periodic payment exchanged between long and short position holders. This helps ensure that the price of the perpetual swap closely aligns with the underlying asset’s price. If the price of the swap rises above the underlying asset’s price, long holders pay short holders, and vice versa.Perpetual swaps offer high leverage, enabling traders to amplify their exposure to price movements. However, this also increases the risk of liquidation if the market moves against their position. Due to their flexibility and potential for profit, perpetual swaps have become increasingly popular among traders looking to capitalize on short-term price fluctuations.