There are two major product categories in the Binance Futures section: Perpetual Futures and Delivery Futures (Quarterly Futures). Many people think the only difference is "whether there is an expiration date," but in reality, they differ immensely in funding rates, hedging utility, and premium/discount structures. This article thoroughly explains the differences between the two. You can find entrances to both types of futures on the Binance official website. Using the Binance Official APP to check market prices is more convenient; Apple users should follow the iOS installation tutorial.
One-Sentence Comparison
- Perpetual Futures: No expiration date, can be held forever, and anchors to the spot price via funding rates.
- Delivery Futures (Quarterly): Fixed expiration dates, forced settlement at expiration based on the settlement price, and no funding rates.
This single characteristic is their core difference, but it spawns entirely different trading strategies.
Detailed Comparison
| Aspect | Perpetual Futures | Delivery Futures |
|---|---|---|
| Expiration Date | None | Current Quarter / Next Quarter |
| Funding Rate | Yes (Every 8 hours) | None |
| Anchoring Mechanism | Funding Rate | Settlement at Expiration |
| Price Deviation | Small | Can be significant |
| Use Cases | Short-term speculation, trend following | Hedging, cash-and-carry arbitrage |
| Liquidity | Extremely High | Moderate |
| Liquidation Mechanism | Identical | Identical |
| Settlement Method | No settlement | Settled at expiration against Spot Index Price |
How Perpetual Futures Anchor Prices
Perpetual futures have no expiration date, so what keeps their prices closely aligned with the spot price? The answer is the Funding Rate.
Settlement occurs every 8 hours (08:00, 16:00, 00:00 UTC+8). Longs and shorts pay each other based on the funding rate:
- Positive Funding Rate (Futures price is higher than spot) → Longs pay shorts.
- Negative Funding Rate (Futures price is lower than spot) → Shorts pay longs.
Economic implication of a positive rate: Market sentiment leans bullish, everyone is rushing to go long → Futures premium → Positive rate → Longs pay fees, incentivizing others to open shorts and arbitrage, dragging the price back to spot levels.
Common Rate Ranges:
- Normal Market: ±0.01% per 8 hours (0.03% daily).
- Overheated Bull Market: 0.1% per 8 hours (0.3% daily, 109% annualized).
- Extreme Market: Historically as high as 0.75%, or -0.75% during extreme bearish panics.
Naming Conventions for Delivery Futures
Binance Delivery Futures use the format Underlying-ExpirationDate, for example:
- BTCUSD_240329 — Expires on March 29, 2024
- BTCUSD_240628 — Expires on June 28, 2024
Expiration dates are typically the last Friday of each quarter (March, June, September, December).
Why Professional Traders Sometimes Prefer Delivery Futures
Reason 1: No Funding Rates
When holding positions for long periods, perpetual futures slowly eat into margins via funding rates. For instance, going long during a bear market rebound and holding for a month could result in losing 3-5% of your margin if the funding rate remains positive. Delivery futures completely avoid this problem.
Reason 2: Premium/Discount Arbitrage
Delivery futures prices are usually higher than spot (contango/premium), especially in the mid-to-late stages of a bull market, where premiums can reach 5-15%. During these times, professional traders execute cash-and-carry arbitrage:
- Buy 1 BTC in the spot market.
- Open a 1 BTC short position on Delivery Futures (equivalent hedge).
- Hold until expiration.
- At expiration, the delivery contract settles at the spot index, locking in the premium as pure profit.
This is a risk-free arbitrage with annualized yields that can reach 10-30%.
Reason 3: Forward Price Expectations
Delivery futures prices reflect the market's expectations for a future point in time. The price difference between the Next Quarter and Current Quarter contracts can be used to infer market sentiment—a larger spread indicates a stronger bullish outlook for the future.
Advantages of Perpetual Futures
Advantage 1: Unrivaled Liquidity
BTCUSDT perpetual contracts are the most liquid crypto derivative globally, frequently seeing daily trading volumes exceeding 30 billion USD. Slippage is extremely low, allowing even massive orders to be filled efficiently.
Advantage 2: No Rollover Required
When Delivery Futures expire, you need to "roll over"—closing the old contract and opening a new one, incurring double fees + slippage each time. Perpetual futures allow a single opened position to be held indefinitely, saving time and money.
Advantage 3: Higher Leverage
BTCUSDT perpetual contracts support up to 125x leverage, whereas Delivery Futures max out at 50x. Binance intentionally caps Delivery leverage because forced expiration settlement carries greater risk.
Practical Strategy Recommendations
For Beginners → Perpetual Futures
Perpetual futures offer better liquidity, easier entry/exit, and no worry about expiration. Operation is straightforward, suitable for learning. Just remember to account for the impact of funding rates.
For Long-Term Holding → Delivery Futures
If you plan to hold a position for more than 2 weeks, prioritize Delivery Futures to avoid slowly bleeding out from funding rates.
For Arbitrage → Watch the Spread
- Perpetual Premium is Too High → Short Perpetual + Long Delivery.
- Delivery Premium is Too High → Long Perpetual + Short Delivery.
- Cash-and-Carry Arbitrage → Long Spot + Short Delivery.
How to Check Funding Rates
Method 1: Check on the Trading Page
Open the BTCUSDT perpetual contract page, and the top right corner displays the "Next Funding Rate", alongside a countdown timer.
Method 2: Historical Rates Page
The "Funding Rate History" section below the trading interface allows you to view the historical rate every 8 hours, as well as annualized data.
Method 3: API Query
For algorithmic traders, Binance offers a Funding Rate API:
GET /fapi/v1/fundingRate?symbol=BTCUSDT&limit=100
What Happens When Delivery Futures Expire
At the time of expiration (16:00 UTC+8), the contract enters Settlement Mode:
- 5 minutes before settlement: All pending orders are cleared by the system, and no new orders can be placed.
- Moment of settlement: All open positions are forcefully settled based on the TWAP (Time-Weighted Average Price) of the Spot Index over the final 1 hour.
- After settlement: Positions are cleared, and profit/loss is settled to your wallet.
Note: Settlement is not based on the instantaneous spot price, but the 1-hour TWAP, preventing large whales from manipulating the price at the final second.
Frequently Asked Questions
Q: Could Binance theoretically delist perpetual futures one day?
A: Theoretically, Binance can delist any contract, but core products like BTC and ETH perpetuals will not be cancelled. Low-cap altcoin contracts are occasionally delisted due to insufficient liquidity. Before delisting, Binance issues advance announcements and forces settlement based on the mark price.
Q: Will I be charged extra money if I don't close my Delivery position before expiration?
A: No extra fees are charged. Your position will simply be forcefully closed according to the last 1-hour TWAP. If this price is better than your entry price, you profit; if worse, you lose. The only difference from manual closing is that you lose control over selecting the exit price.
Q: Who sets the funding rate for perpetual futures?
A: Binance doesn't set it; the market forms it automatically. The Binance formula = Interest Rate Component + Premium Component. The premium component reflects the deviation of the contract price relative to the spot, meaning the funding rate is essentially a direct reflection of market sentiment.
Q: Are fees cheaper for Perpetual or Delivery Futures?
A: They are identical. The Binance Futures fee schedule is a uniform 0.04% for Takers and 0.02% for Makers, regardless of contract type. The higher your VIP level, the lower the fee.