What are Perpetual Options?

Perpetual Options are a novel new crypto derivative instrument that combines the risk-reward profile of options (protected downside with unlimited upside) with the simplicity of perpetual futures.

Perpetual options are:

Options that never expire

Unlike traditional options that have a fixed expiration date, Perpetual Options can be held indefinitely, reducing expiry timing risk

Continuously funded instruments

Instead of paying a large premium upfront, traders pay (or receive) a continuous funding rate based on market conditions to hold a position

Simplified derivatives

They follow the same straightforward PnL structure as perpetual futures (entry price, exit price, funding)

Core Idea

Perpetual Options fit naturally within the derivative framework crypto traders know and love (perpetuals) while offering a new way to access leverage without taking price-based liquidation risk.

Why Trade Perpetual Options?

Perpetual options blend the upside of leverage with built‑in downside protection—so you can stay in a trade, without the constant threat of getting liquidated (by price).

In perp options, the extra funding also covers downside protection, so price swings are less deadly. In perp futures, funding simply pays for leverage.

Comparison
Perpetual Futures vs Perpetual Options

Detailed Comparisons

FeaturePerpetual OptionsPerpetual Futures
Payoff StructureNon Linear and Asymmetric
(Accelerated Upside + Limited Downside)
Linear and Symmetric
(unlimited upside and downside)
LeverageVariable leverage based on option deltaFixed leverage based on margin
FundingIncludes cost of leverage plus insuranceOnly reflects cost of leverage
Liquidation RiskLower liquidation risk (for buyers)Higher liquidation risk
Capital EfficiencyMay require less capital for similar exposureRequires more capital to avoid liquidation
Core Idea

In simple terms, Perpetual Options can be thought of as “insurance-enhanced” perpetual futures, where you pay a higher funding rate in exchange for protection against adverse price movements.

Margin and Risk Comparison

A key advantage of Perpetual Options is their unique margin structure compared to perpetual futures:

High leverage without liquidation risk

Unlike futures, option buyers cannot be liquidated due to adverse price movements

High effective leverage

Especially with out-of-the-money options, achieve effective leverage >50x

Known maximum loss

Your maximum risk is limited to the funding you pay while holding the position