Options Boot Camp 404: WTH Are PERPS?

What the heck are PERPS—and why are they suddenly everywhere? On this episode of Options Boot Camp, Mark Longo and Dan Passarelli tackle one of the hottest topics in the derivatives world: perpetual futures, better known as perps. They break down how perpetual futures work, why they don't have expiration dates, how they differ from traditional futures contracts, and why eliminating expiration also eliminates the need to constantly roll positions. Then they dive into the all-important funding rate—the mechanism designed to keep perpetual futures prices aligned with the underlying market. Using easy-to-follow examples, the hosts explore what happens when a perp trades at a premium or discount to the underlying, who pays the funding rate, how professional traders may respond, and why the mechanics can vary significantly from one trading venue to another. They also discuss the growing interest in perps across the derivatives industry, the comparison between perpetual futures and 0DTE options, and why options traders should understand this increasingly important product. Plus, in the Mail Call, the crew discusses whether it might finally be time to revisit and remaster some of the earliest Options Boot Camp episodes for a new generation of options traders. Topics include: What are perpetual futures (perps)? Perpetual futures vs. traditional futures Why perps don't expire How funding rates work Positive vs. negative funding rates Perps trading at premiums and discounts Arbitrage and price convergence Perpetual futures vs. 0DTE options The growing role of perps in derivatives trading Revisiting the early days of Options Boot Camp