What Are Stock Perpetuals? How Funding Rates Work and How to Calculate Them
How stock perpetuals differ from stock tokens, leverage and liquidation risk, what funding rates mean, how often they settle and how to calculate them, and what to watch when the US market is closed.
Search for Apple or Tesla on an exchange and, alongside stock tokens, you will see stock perpetuals such as AAPLUSDT and TSLAUSDT. The names are similar but they work very differently. This guide explains what stock perpetuals are, how they differ from stock tokens, and how to read and calculate the funding rate that drives your holding cost.
What is a stock perpetual?
A stock perpetual is a derivative with no expiry whose price tracks a stock. You buy (go long) or sell (go short) the contract to gain or lose from price moves, without holding the stock or a stock token.
- Leverage: control a larger position with less margin. Our stock pages list each venue's maximum leverage; popular US stock perpetuals go up to 100x on some venues.
- Shorting: you can trade a falling price.
- Liquidation risk: if the price moves against you and your margin runs short, the position is closed automatically. The higher the leverage, the smaller the move you can withstand.
- Funding payments: a mechanism unique to perpetuals, explained below.
If you simply want to hold exposure to a stock without leverage or shorting, a stock token is usually simpler; see What are tokenized stocks.
What is the funding rate?
Because perpetuals never expire, exchanges use funding to keep the contract price close to the stock price (the index price): longs and shorts periodically pay each other.
- Positive funding: the contract usually trades above the index, and longs pay shorts.
- Negative funding: the contract usually trades below the index, and shorts pay longs.
Funding moves between traders; the exchange does not keep it.
How to calculate funding
At each settlement, the amount you pay or receive = position value × funding rate.
Example: you hold a $1,000 long in the AAPL perpetual and the current funding rate is +0.01%. At settlement you pay 1,000 × 0.01% = $0.10. If funding settles every 8 hours at the same rate, that is $0.30 a day. Position value is the notional size, so a leveraged position pays funding on the full leveraged amount.
How often funding settles
Settlement intervals vary. On most exchanges we track, stock perpetuals settle every 8 hours; on-chain Hyperliquid settles hourly. To make venues comparable, we convert Hyperliquid's hourly rate to an 8-hour equivalent. Check each venue's contract specifications for the exact schedule.
Watch out when the US market is closed
Stock perpetuals usually trade around the clock, but the stock only has live quotes during market hours. While the market is closed (overnight, weekends and holidays), venues calculate the index differently, so the contract can drift far from the last close and snap back at the open, creating a gap. Highly leveraged positions are especially exposed to liquidation at these times.
Comparing stock perpetuals on this site
- On a stock page, open "More metrics" in the venue table to see open interest, funding rate and maximum leverage by venue.
- The rankings list the stock perpetuals with the highest and lowest funding. Very high funding means crowded longs and a higher cost of holding a long position.
- The exchange comparison shows account requirements and regional availability.
Stock perpetuals are high-risk leveraged products and you can lose your entire margin. This guide explains concepts only and is not investment advice.