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When I take a position in a perpetual future (e.g. 3x long), must there be someone holding the opposite position (3x short)?

If so, suppose I entered a long 3x position on an asset at $100 and you took the opposite position (short 3x). When the price went up to $125, you closed your position. But since it is a perpetual future, I can keep my position as long as I can maintain it.

Since you closed your position and I didn't, who is holding the opposite side of my position? What if I closed the position at $200? Who will incur the loss for the profit I made?

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  • What does this have to do with cryptocurrency?
    – Dilip Sarwate
    Commented Sep 6, 2021 at 3:29
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    @DilipSarwate Cryptocurrency markets have the most developed markets for perpetual futures.
    – Flux
    Commented Sep 6, 2021 at 8:30
  • I would argue that the question (and the correct answer) is applicable to futures in general, so the "perpetual" qualifier and cryptocurrency tag could be removed.
    – D Stanley
    Commented Sep 7, 2021 at 20:59
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    @DStanley No, it cant. Please try to read questions carefully before arguing. Because non-perpetual contracts are of fixed time so there is always a counterpart during the time of contract. This question is not applicable for non-perpetual contracts. And BitMEX ( a crypto exchange) was the first exchange to use perpetual contract exclusively, hence, this is related to cryptocurrency as well. Read this wikipedia for verification. en.wikipedia.org/wiki/….
    – Crocodile
    Commented Sep 14, 2021 at 10:51
  • @DilipSarwate Please read my above comment to know what it has to do with crypto currency. Basically, it is because perpetual futures was started by crypto exchange. Refer this article for verification. Second paragraph. en.wikipedia.org/wiki/….
    – Crocodile
    Commented Sep 14, 2021 at 10:55

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When I take a position in a perpetual future (e.g. 3x long), must there be someone holding the opposite position (3x short)?

Yes, someone must be holding the opposite position.

There are two counter parties to every transaction. It doesn't matter what kind of security you are trading.

At the onset, (A) buys XYZ and (B) shorts it.

XYZ now rises and (B) buys to close his short position from seller (C).

Now the counterparties are (A) long and (C) short.

If XYZ continues to rise, (C) incurs the loss while (A) profits.

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  • Thank you very much, this answers my question.
    – Crocodile
    Commented Sep 8, 2021 at 23:54

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