Pre-IPO perps are perpetual futures that track the value of a private company before it goes public. They let you take a long or short position on a company even though there are no public shares to buy. A real example: SpaceX (SPCX) traded as a pre-IPO perp on Legend while it was still private — so traders could take a position on the company before its IPO. As pre-IPO names eventually go public, new private companies get listed in their place.
Why Pre-IPO Perps Exist
Private companies are normally impossible for retail traders to access. Shares are locked up among employees, venture funds, and a handful of secondary markets with high minimums and gatekeeping. By the time a hot company IPOs, much of the upside is already gone.
A pre-IPO perp changes that. Because it's a perp — a contract that tracks a price rather than a share you own — you can get exposure to a private company's valuation today, in either direction.
How They're Priced Without a Public Market
A normal stock perp tethers to the stock's live market price via a funding rate. But a private company has no public market, so there's no live share price to track.
Instead, pre-IPO perps price off an index or oracle — a reference value derived from sources like recent funding-round valuations, secondary-market activity, and other signals. The funding rate then keeps the perp tethered to that reference. This is the key difference to understand: the "underlying" is a constructed valuation, not a continuously traded share price.
What You Can Do
- Go long if you think a private company's valuation will keep climbing toward (or beyond) its eventual IPO.
- Go short if you think a name is overhyped or richly valued.
- Use leverage, with risk capped to your position's margin on isolated-margin markets.
The Risks
Pre-IPO perps carry everything a normal perp does, plus some unique wrinkles:
- Oracle dependence. Your PnL rides on how the reference valuation is formed and updated. Understand the index methodology before sizing up.
- Thinner liquidity. Private-company markets are newer and can have wider spreads than mega-cap names.
- Valuation gaps. A new funding round, secondary print, or IPO announcement can reprice the underlying sharply.
Pre-IPO perps are a way to express an early, high-conviction thesis — but they reward research and modest sizing. To see the full lineup, check can you trade stocks on Legend.