GlossaryConcept
Pre-IPO Perpetual: What It Is and How It Works
A pre-IPO perpetual is a perpetual futures contract that lets traders speculate on the implied valuation of a private company before it lists, without owning any shares. Because there is no public share price yet, its price comes from the contract's own market.
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How a pre-IPO perpetual works
An ordinary perpetual futures contract anchors itself to a spot price through the funding rate. A private company, such as OpenAI or Anthropic, has no public share price to anchor to. Pre-IPO perpetuals solve this by pricing against themselves:
- The contract's price is set only by the buyers and sellers trading it, and is usually quoted in terms of the company's implied valuation.
- Funding is calculated against a moving average of the contract's own mark price, rather than an external oracle, a model built for assets that have no spot market yet.
- On those venues, once the underlying asset gets a real market, the contract can switch to a standard perp that follows an external price.
Traders post collateral, typically a stablecoin, use leverage and can be liquidated. No shares, allocations or company rights are ever delivered.
What the price tells you
A pre-IPO perp's price reflects what its traders expect the company to be worth, not a valuation set by the company, its investors or a stock exchange. It can differ widely from the latest private funding round, and if the company never lists, or lists on very different terms, the market has no fixed point to converge to.
Risks of pre-IPO perpetuals
- No external anchor: the price can move far and fast on thin trading.
- Manipulation: small markets are easier to push around, and large traders can trigger liquidations.
- Leverage: liquidation risk is higher than usual because volatility is high.
- Event risk: news about funding rounds, delays or cancelled listings can cause sudden jumps.
- Regulation and access: derivatives on private companies are restricted or unavailable in many jurisdictions.
This is general information, not a recommendation to trade any instrument.
Pre-IPO perpetual vs pre-IPO shares vs stock perpetual
Buying pre-IPO shares through a secondary platform or fund gives an actual (often indirect) ownership stake, usually with restrictions and minimums. A pre-IPO perpetual gives only price exposure. A stock perpetual tracks a company that is already listed, so it has an external share price to follow; a pre-IPO perp does not. See also tokenized stocks.
Frequently Asked Questions
What is a pre-IPO perpetual?
It is a perpetual futures contract that tracks the market's view of a private company's valuation before it goes public, with no shares involved.
How is a pre-IPO perpetual priced without a share price?
Its price comes from trading in the contract itself, and funding is calculated against a moving average of its own mark price instead of an external oracle.
Do I get shares when the company goes public?
No. The contract gives price exposure only. It never delivers shares, allocations or any rights in the company.
Why are pre-IPO perpetuals risky?
They trade without an external price anchor, often with thin liquidity and leverage, so prices can swing sharply and positions can be liquidated.