What is the difference between perpetual futures and traditional futures on Binance US?

5 answers

• fanDec 02, 2021 · 4 years ago
  Perpetual futures and traditional futures are both derivatives contracts that allow traders to speculate on the price movements of an underlying asset. However, there are some important differences between the two. Perpetual futures contracts do not have an expiration date, which means that traders can hold their positions indefinitely. On the other hand, traditional futures contracts have a fixed expiration date, after which the contract is settled. Another key difference is the funding mechanism. Perpetual futures contracts use a funding rate to maintain the contract's price close to the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures contracts, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. In terms of trading fees, perpetual futures contracts usually have a funding fee that is paid by traders who hold their positions for a longer period of time. Traditional futures contracts, on the other hand, have a commission fee that is paid by both the buyer and the seller. Overall, perpetual futures contracts offer more flexibility and do not require traders to constantly roll over their positions like traditional futures contracts. However, they also come with additional risks, such as the potential for large funding fees in volatile markets.
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• Razorback Drain ProsJun 30, 2024 · 2 years ago
  Perpetual futures and traditional futures are two different types of derivatives contracts offered on Binance US. Perpetual futures contracts are designed to mimic the price of the underlying asset, allowing traders to speculate on its future price movements. These contracts do not have an expiration date and can be held indefinitely. On the other hand, traditional futures contracts have a fixed expiration date and are settled at that time. One of the main differences between perpetual futures and traditional futures is the funding mechanism. Perpetual futures contracts use a funding rate to ensure that the contract's price closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures contracts, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. Another difference is the trading fees. Perpetual futures contracts usually have a funding fee that is paid by traders who hold their positions for a longer period of time. Traditional futures contracts, on the other hand, have a commission fee that is paid by both the buyer and the seller. In summary, perpetual futures contracts offer more flexibility and do not have an expiration date, while traditional futures contracts have a fixed expiration date. The funding mechanism and trading fees also differ between the two types of contracts.
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• Revamped Pest ManagementNov 02, 2020 · 5 years ago
  Perpetual futures and traditional futures are two different types of futures contracts available on Binance US. Perpetual futures contracts are designed to track the price of the underlying asset and allow traders to speculate on its future price movements. These contracts do not have an expiration date and can be held indefinitely. Traditional futures contracts, on the other hand, have a fixed expiration date and are settled at that time. This means that traders need to roll over their positions before the expiration date if they want to continue holding them. One of the key differences between perpetual futures and traditional futures is the funding mechanism. Perpetual futures contracts use a funding rate to maintain the contract's price close to the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures contracts, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. In terms of trading fees, perpetual futures contracts usually have a funding fee that is paid by traders who hold their positions for a longer period of time. Traditional futures contracts, on the other hand, have a commission fee that is paid by both the buyer and the seller. Overall, perpetual futures contracts offer more flexibility and do not require traders to constantly roll over their positions like traditional futures contracts. However, traders should be aware of the funding fees associated with perpetual futures contracts.
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• Ken W.Jun 17, 2024 · 2 years ago
  Perpetual futures and traditional futures are two types of futures contracts offered on Binance US. Perpetual futures contracts do not have an expiration date and can be held indefinitely, while traditional futures contracts have a fixed expiration date. The key difference between perpetual futures and traditional futures lies in their funding mechanism. Perpetual futures contracts use a funding rate to maintain the contract's price close to the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures contracts, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. In terms of trading fees, perpetual futures contracts usually have a funding fee that is paid by traders who hold their positions for a longer period of time. Traditional futures contracts, on the other hand, have a commission fee that is paid by both the buyer and the seller. Overall, perpetual futures contracts offer more flexibility and do not require traders to roll over their positions like traditional futures contracts. However, traders should be aware of the funding fees associated with perpetual futures contracts.
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• DhaperMar 14, 2021 · 5 years ago
  Perpetual futures and traditional futures are two different types of futures contracts available on Binance US. Perpetual futures contracts do not have an expiration date, which means that traders can hold their positions indefinitely. Traditional futures contracts, on the other hand, have a fixed expiration date and are settled at that time. One of the main differences between perpetual futures and traditional futures is the funding mechanism. Perpetual futures contracts use a funding rate to maintain the contract's price close to the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures contracts, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. In terms of trading fees, perpetual futures contracts usually have a funding fee that is paid by traders who hold their positions for a longer period of time. Traditional futures contracts, on the other hand, have a commission fee that is paid by both the buyer and the seller. Overall, perpetual futures contracts offer more flexibility and do not require traders to constantly roll over their positions like traditional futures contracts. However, traders should be aware of the funding fees associated with perpetual futures contracts.
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