> ## Documentation Index
> Fetch the complete documentation index at: https://help.arcus.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# How do Equity Perps stay aligned with the underlying stock price?

An Equity Perp trades in its own order book, so its price can drift from the stock's, and the funding rate pulls it back. When the perp trades above the stock's reference price, longs pay shorts; when it trades below, shorts pay longs. That makes the richer side costlier to hold, so traders are continuously paid to close the gap, and with no expiry to force convergence, funding is what keeps the two in line.

While the US market is open, the reference is the stock's live price. When it's closed (overnight, weekends, holidays), there's no live price to track, so the perp trades on where the market expects the stock to reopen, with funding on a fixed financing rate until it does (see *How are funding rates calculated?*). When the underlying reopens, the live reference returns and re-anchors the perp.