When you open the futures market on the official Binance website or the futures tab in the official Binance App, you will see "Perpetual" and "Delivery" contracts listed side-by-side. Simply put: Perpetual contracts have no expiry date and can be held indefinitely, using a Funding Rate mechanism to align the contract price with the spot market. Delivery (Quarterly) contracts have fixed settlement dates (Weekly, Bi-weekly, Quarterly, Bi-quarterly); upon expiry, they are settled at a mandatory price without funding fees, though a "basis" (price gap) exists between the futures and spot price. For daily trading, beginners should stick to Perpetual. Advanced traders typically use Delivery for long-term hedging, arbitrage, or to avoid funding costs. If you haven't installed the client yet, refer to the iOS Installation Tutorial.
1. The Fundamental Difference: Expiry
The most essential difference is the "Expiration Date."
- Perpetual Futures: No expiry date. In theory, you can hold a position forever. However, a Funding Rate is settled every 8 hours to prevent the contract price from deviating too far from the spot price for long periods.
- Delivery Futures: These have a fixed expiration time. You can buy or sell them before expiry, but at the moment of expiration, all positions are settled at the index price, profits and losses are realized, and positions are closed.
This single difference dictates that the cost structure, price behavior, and arbitrage methods for these two types of contracts are entirely different.
2. The Four Cycles of Binance Delivery Futures
Binance currently offers four standard cycles for Delivery Futures:
| Cycle | Settlement Time | Holding Duration | Best For |
|---|---|---|---|
| Weekly | Friday 16:00 (UTC) | 0-7 Days | Short-term traders |
| Bi-weekly | Following Friday 16:00 | 7-14 Days | Short-to-mid term |
| Quarterly | Last Friday of the quarter | 0-90 Days | Mid-to-long term |
| Bi-quarterly | Last Friday of the next quarter | 90-180 Days | Long-term hedging |
Quarterly and Bi-quarterly are the most commonly used due to their superior liquidity. Weekly and Bi-weekly have thinner liquidity and are primarily used for short-term strategies or rolling arbitrage.
3. Perpetual vs. Delivery Comparison Table
| Dimension | Perpetual Futures | Delivery Futures |
|---|---|---|
| Expiration | None | Fixed Expiry |
| Funding Rate | Yes, settled every 8 hours | None |
| Price Anchor | Funding Rate pulls price to spot | Natural convergence via basis |
| Long-term Holding Cost | Cumulative funding fees | Futures-spot basis loss/gain |
| Liquidity | Extremely high | Strong for major Quarterlies; lower for Weekly |
| Price Characteristics | Closely tracks spot | Far-month contracts may trade at a 5%-15% premium/discount |
| Short-term Trading | Yes | Yes (Weekly liquidity is lower) |
| Long-term Hedging | Moderate (Funding drag) | Strong (No funding fees) |
| Arbitrage Potential | Funding rate arbitrage | Futures-spot basis arbitrage |
| Liquidation Mechanism | Based on maintenance margin | Same, but risk increases near delivery |
4. Understanding Holding Costs with Real Numbers
Suppose you want to go long on 1 BTC at a price of 60,000 and hold it for 90 days.
Perpetual Futures:
- Assume an average funding rate of +0.01% per interval (0.03% per day).
- Total 90-day fees = 60,000 × 0.0001 × 3 × 90 = 1,620 USDT.
- Cost ratio = 1,620 / 60,000 = 2.7%.
Quarterly Delivery Futures:
- Assume the Quarterly contract is trading at 60,800 (a 800 premium/contango) at entry.
- Upon delivery, the price converges to 60,000 (based on the settlement index).
- Total cost = 800 USDT (Basis loss).
- Cost ratio = 800 / 60,000 ≈ 1.3%.
If the funding rate spikes to +0.03%, the Perpetual cost over 90 days would hit 4,860 USDT (8.1%). This is why long-term bulls often shift from Perpetual to Delivery during overheated bull markets. Conversely, if funding rates remain negative (bear market panic), you get paid to hold a long position in Perpetual, making it more cost-effective than Delivery.
5. When to Choose Perpetual Futures
Perpetual contracts are ideal for most daily scenarios:
- Short-term Trading: For frequent entries and exits, funding fees are negligible, while Perpetual offers better liquidity and lower slippage.
- Trend Following: For mid-to-short term trades with a clear direction (holding hours to days), Perpetual is the top choice.
- Low Funding Environments: When the next funding rate is negative or near zero, going long has little to no cost drag.
- Indeterminate Duration: If you aren't sure if you will hold for days or weeks, Perpetual avoids the pressure of an expiration date.
- Altcoin Trading: Long-tail assets often only have Perpetual markets and lack Delivery options.
6. When to Choose Delivery Futures
The advantages of Delivery contracts lie in the "No Funding Fees" and "Forward Pricing."
- Long-term Directional Positions: If you are bullish on BTC reaching a certain price in 6 months, you can buy Quarterly/Bi-quarterly longs without being bled by funding fees.
- High Funding Rate Environments: When Perpetual rates consistently stay above +0.03%, switching to Delivery saves significant holding costs.
- Basis Arbitrage: Combining Perpetual, Spot, and Delivery to capture both basis convergence and funding fees.
- Institutional Hedging: Miners and market makers use Delivery Futures to lock in a selling price for the coming months—it's a natural hedging tool.
- Predictable Holding Costs: While funding rates fluctuate with market sentiment, the holding cost of a Delivery contract is largely locked in at entry via the basis.
7. Special Risks Near Delivery
As a Delivery contract approaches its expiration date, several risks become magnified:
Step 1: Liquidity Depletion
Liquidity drops sharply in the final week. The order book thins out, leading to potentially volatile price swings.
Step 2: Increased "Wicking"
Market makers reduce their quotes, meaning a single large order can easily sweep through the order book, causing price spikes or "wicks."
Step 3: Rapid Basis Convergence
As delivery nears, the contract price converges toward the index price. If you hold a "premium long," the basis will eat into your profits.
Step 4: Rollover Pressure
Many traders roll their positions from "Quarterly" to "Bi-quarterly" in the final week, causing a seasonal liquidity drain.
Step 5: Mandatory Settlement
Delivery is calculated based on the index weighted average price. You cannot manually choose your exit price at the moment of expiry. If the market is volatile at settlement, the price may be unfavorable.
Advice: Do not hold Delivery contracts into the final two days; either close the position manually or roll it over to the next cycle.
8. Common Perpetual + Delivery Strategies
Advanced traders often combine the two:
- Funding Rate Arbitrage: Shorting Perpetual while buying Spot to collect positive funding; if rates turn negative, they might go long Perpetual and short Delivery.
- Calendar Spreads: Profiting from unreasonable price gaps between Quarterly and Bi-quarterly contracts by longing the cheap one and shorting the expensive one.
- Direction + Hedging: Using Perpetual for the core trend and Delivery for long-term hedging to achieve the lowest overall holding cost.
- Risk Isolation: Using 5% of capital for Perpetual short-term trades while locking in the remaining exposure with Delivery to avoid funding rate "surprises."
9. COIN-M Perpetual vs. COIN-M Delivery
In addition to USD-M (USDT), Binance offers COIN-M (Crypto-Margined) Perpetual and Delivery. The differences are similar:
| Type | Margin | Expiry | Funding Rate |
|---|---|---|---|
| BTCUSDT Perpetual | USDT | None | Yes |
| BTCUSDT Quarterly | USDT | Yes | No |
| BTCUSD Perpetual | BTC | None | Yes |
| BTCUSD Quarterly | BTC | Yes | No |
Miners and "HODLers" most frequently use "BTCUSD Quarterly" to lock in the USD value of their future BTC production without funding fee interference.
10. FAQ
Q: Will Delivery Futures close automatically? A: Yes. Once the settlement time is reached, all positions are settled at the mandatory index price, PnL is realized, and positions are closed. No manual action is required.
Q: How is the settlement price calculated? A: Binance typically uses the index weighted average price over the final period (e.g., the last hour) to prevent manipulation by single large orders.
Q: Can I use Perpetual and Delivery together for hedging? A: Yes. A common strategy is longing Perpetual and shorting Delivery (or vice versa) to hedge against funding rates and basis fluctuations.
Q: Can I close a Delivery position early? A: Yes. You can buy, sell, or close a position at any time before expiration, just like a normal contract.
Q: Can Perpetual contracts be delisted? A: Rarely for major assets. Altcoins with low trading volume for extended periods may be delisted, but mainstream Perpetual contracts like BTC and ETH are permanent.
Q: Is the leverage for Delivery the same as Perpetual? A: Generally yes. BTC-related contracts support up to 125x, while others may be capped at 25-50x. Always refer to Binance announcements for specific limits.
Q: Should a beginner's first trade be Perpetual or Delivery? A: Perpetual. Due to higher liquidity, no expiration pressure, and more intuitive operation, it's better to master the basics there before moving to the strategic usage of Delivery Futures.
Futures are leveraged derivatives. Perpetual and Delivery are simply two different structures; neither is inherently "safer." Your choice depends on your holding period, funding rate levels, and strategic goals. We recommend testing both with minimal positions on the official Binance website first. For detailed risk disclosures, see our Disclaimer.