There are now three common ways to take a position in a single stock: buy the share, buy an option on it, or trade a perp that follows it. They can all make money when the stock rises. Past that, they have little in common. The clearest way to compare them is to ask two questions of each. What do you own, and what do you owe?
A share
A share is a piece of the company. You own it outright. It pays you any dividend the company declares and it carries a vote. It has no expiry and no running cost if you paid in full. The most you can lose is what you paid. You can only trade it when the stock market is open.
An option
An option is a right with a date on it. A call gives you the right to buy at a set price until expiry. You own that right and nothing else. The price you pay for it, the premium, is the most you can lose as a buyer. In exchange you take on time decay: every day that passes costs you something, and the option’s value also moves with implied volatility. An option’s payoff is curved. It gains faster as the stock moves your way and it can expire worthless even when you were right about direction but early.
A stock perp
A perp is a contract that follows the stock’s price with no expiry. You own no share and no right to one. You post margin in a stablecoin and the position gains or loses in a straight line with the price. There is no strike, no time decay and no volatility term. Stock perps, explained covers the basics.
What you owe is funding, charged hourly while the position is open, and it can run in your favor or against you. You also owe the venue enough margin to keep the position alive. If the price moves far enough against you, the position is liquidated, which is the subject of leverage and liquidation on a stock perp.
The same view, three risks
Hold a share through a bad week and you still hold the share. Hold a call through the same week and you may be out of time. Hold a leveraged perp through it and you may have been closed out on the way down, even if the stock later recovers. The view was the same in all three. What ended the trade was different each time.
The running cost differs too. The share costs nothing to hold. The option’s cost was paid up front and decays. The perp’s cost arrives hourly and changes with the crowd, as funding on a stock perp describes.
What only the perp does
The perp trades when the other two cannot. Shares and listed options stop when the stock market shuts. The perp trades around the clock, weekends included. That is its real distinction for an equity trader, and it comes with thin hours and a contract that sits on a different venue under different terms.
Reading all three
NoVo reads rather than trades. Trader shows dealer positioning from the options market on SPY, QQQ and IWM, and its Perps & Futures tab shows the index and mega-cap perps. The Stocks On-Chain tab of the Crypto Market Map lists every stock perp and stock token.