> For the complete documentation index, see [llms.txt](https://docs.bbx.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bbx.com/business/on-chain-perpetual-trading/overview.md).

# Overview

Perpetual trading allows users to gain price exposure to an underlying asset without actually owning it. Traders establish positions through perpetual contracts that track market prices, rather than directly exchanging tokens. BBX's perpetual trading is designed to provide ample liquidity, transparent pricing, and robust risk controls — fully integrated with the BBX ecosystem.

**What is a Perpetual Contract?**

A perpetual contract is a derivative instrument that tracks the price of an underlying asset with no expiration date. Key characteristics:

* No physical delivery of the underlying asset
* Positions can be held indefinitely as long as margin requirements are met
* Profit and Loss (PnL) is determined by price movements
* Traders can go both long and short simultaneously

**Core Components**

BBX's perpetual trading is built on several interdependent mechanisms that work together to ensure fair execution, accurate pricing, and effective risk management. Core components include: Trading Mechanism, Margin & Risk Management, and the Funding Mechanism.

**Differences from Spot Trading:**

* Spot trading involves the actual buying and selling of tokens; perpetual trading involves trading contracts that track prices.
* Perpetual trading supports leverage and short positions; spot trading does not involve liquidation risk.