What are Bitstamp perpetual contracts?

Bitstamp perpetual contracts let traders speculate on crypto prices without owning assets, using leverage and a funding rate to stay aligned with spot prices.

Jul 29, 2025 at 05:57 am

What Are Bitstamp Perpetual Contracts?

Bitstamp perpetual contracts are a type of derivative product that allows traders to speculate on the price of cryptocurrencies—such as Bitcoin (BTC), Ethereum (ETH), and others—without owning the underlying asset. Unlike traditional futures contracts, which have an expiration date, perpetual contracts can be held indefinitely. This makes them ideal for both short-term traders and long-term investors. The price of a perpetual contract is typically pegged to the spot price of the underlying asset through a mechanism called the funding rate, which ensures alignment between the contract and real market value.

How Do Perpetual Contracts Work on Bitstamp?

Perpetual contracts on Bitstamp operate using a leverage system, allowing users to open positions larger than their account balance. For example, with 10x leverage, a trader with $1,000 can control a $10,000 position. Leverage magnifies both gains and losses, so risk management is essential. The platform uses a mark price—not the last traded price—to calculate unrealized profits and losses. This prevents manipulation and liquidations due to temporary price spikes.

• Users can go long (buy) if they expect the price to rise
• Users can go short (sell) if they expect the price to fall
• Positions are maintained by posting initial margin, and a maintenance margin must be kept to avoid liquidation
  

  Understanding the Funding Rate Mechanism

  
  The funding rate is a periodic payment exchanged between long and short traders to keep the contract price close to the spot price. If the perpetual contract trades above the spot price (a state called contango), longs pay shorts. If it trades below (called backwardation), shorts pay longs. This rate is calculated every 8 hours and is visible in the Bitstamp interface.
• Funding rate = (Index Price - Mark Price) / Index Price × Funding Interval
• Traders are only charged or paid if they hold a position at the exact funding time
• No funding is applied to closed positions
  

  This system ensures that the contract remains closely tied to the real-world price of the crypto asset, making it reliable for hedging and speculation.

  How to Open a Perpetual Contract on Bitstamp – Step-by-Step

  
  To trade perpetual contracts on Bitstamp, follow these precise steps:
• Navigate to the Derivatives section of your Bitstamp account
• Select the specific perpetual contract (e.g., BTC/USD PERP)
• Choose your leverage level (e.g., 5x, 10x, 25x—subject to risk tier)
• Enter the order size in USD or the base asset (BTC)
• Select the order type: limit, market, or stop-market
• Review the liquidation price displayed in real-time before confirming
• Click Place Order to open the position
  

  Always double-check the margin requirements and liquidation risk. Bitstamp provides a real-time margin calculator in the trading interface to help you manage exposure.

  Risk Management Tools for Perpetual Contracts

  
  Bitstamp equips traders with tools to minimize risk:
• Stop-loss and take-profit orders can be set when opening or after a position is active
• Auto-deleveraging is not used—Bitstamp relies on a liquidation engine that closes positions only when maintenance margin is breached
• The insurance fund absorbs losses from liquidated positions to prevent negative balances
• Real-time margin ratio tracking helps you monitor how close you are to liquidation
  

  A position is liquidated when the margin ratio falls below the maintenance threshold, which varies by leverage tier. For example, at 10x leverage, the maintenance margin might be 1.5%. If your equity drops to that level, Bitstamp will automatically close the position to prevent further loss.

  Frequently Asked Questions

  Can I hold a Bitstamp perpetual contract indefinitely?
  
  Yes, unlike futures, perpetual contracts have no expiry date. You can hold them as long as you maintain the required margin and pay or receive funding when applicable.

  What happens if my position gets liquidated?
  
  Bitstamp will automatically close your position when your margin ratio hits the maintenance level. You will not owe additional funds—the insurance fund covers any shortfall, so your loss is limited to your initial margin.

  Is there a minimum balance required to trade perpetuals on Bitstamp?
  
  Yes, you must have sufficient funds to cover the initial margin. For example, to open a $1,000 position at 10x leverage, you need at least $100 in your derivatives wallet. The exact minimum varies by asset and leverage.

  How often is the funding rate updated on Bitstamp?
  
  Funding occurs every 8 hours—at 00:00 UTC, 08:00 UTC, and 16:00 UTC. You only pay or receive funding if you hold a position at the exact moment the rate is applied.