Cryptocurrency Futures Trading: Perpetual vs. Delivery Contracts

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Cryptocurrency markets have expanded rapidly since the emergence of Bitcoin, evolving beyond simple spot trading into a diverse ecosystem of derivatives. Among these, futures trading has gained significant attention as a powerful tool for hedging risk and capitalizing on market volatility. This guide explores the fundamentals of cryptocurrency futures trading, focusing on two primary contract types—perpetual and delivery contracts—and how they function within modern digital asset platforms.

What Is Futures Trading?

Futures trading in the crypto space allows investors to speculate on the future price of a digital asset without owning it outright. In essence, it's an agreement between two parties to buy or sell a specific amount of cryptocurrency at a predetermined price on a set date in the future.

This mechanism enables traders to profit from both rising and falling prices. For example:

This two-way trading capability opens up profit opportunities even in bear markets. Additionally, futures can be used strategically for hedging—protecting existing holdings from downside risk—or for executing arbitrage strategies to capture small but consistent gains.

A defining feature of futures trading is leverage, which allows traders to control larger positions with a smaller amount of capital. For instance, with 10x leverage, a $1,000 investment can control $10,000 worth of BTC. However, while leverage amplifies potential profits, it also increases the risk of significant losses, making futures trading more suitable for experienced investors who understand risk management.

👉 Discover how leverage works in real-time trading environments.

Types of Crypto Futures Contracts

Major platforms like OKX offer two main types of futures contracts: perpetual and delivery (or quarterly) contracts. Each serves different trading objectives and time horizons.

1. Delivery Contracts

Delivery contracts have a fixed expiration date. When the contract reaches maturity, all open positions are automatically settled based on the average index price over the final hour before expiry.

These contracts are ideal for traders with a specific market outlook over a defined period. OKX offers several delivery cycles:

If you hold a position past the settlement time, it will be closed automatically regardless of whether you're in profit or loss.

2. Perpetual Contracts

Unlike delivery contracts, perpetual contracts do not expire. Traders can hold positions indefinitely, making them ideal for long-term directional bets or hedging strategies.

To ensure that the perpetual contract price stays close to the underlying spot price, exchanges use a funding rate mechanism:

Only traders holding positions at the exact funding timestamp are affected. Closing before then avoids any funding cost or receipt.

👉 See how funding rates impact your trading strategy over time.

3. Coin-Margined Contracts

In coin-margined contracts, the collateral and settlement currency is the same as the underlying asset—for example, BTC is used to trade BTC/USD contracts.

Key features:

This model suits investors already holding large amounts of a particular cryptocurrency and looking to manage exposure without converting to stablecoins.

4. U-Margined Contracts (USDT/USDC)

U-margined contracts use stablecoins—typically USDT or USDC—as collateral and for profit/loss settlement.

Key advantages:

Because all gains and losses are measured in stablecoins, this format appeals to traders focused on pure directional plays without added currency risk.

How to Execute a Futures Trade

Step 1: Choose Your Contract Type

Decide whether you’re trading a perpetual or delivery contract based on your time horizon and market view:

Also determine your position direction:

Step 2: Select Margin Mode

You can choose between two margin modes:

You can switch modes only when you have no open orders or positions.

Step 3: Set Order Parameters

Choose your order type:

Use technical tools like K-line charts to inform your entry point. The required margin is calculated as:

Contract Value ÷ Leverage

Your account must have sufficient equity to cover this amount.

Step 4: Manage Your Position

Once filled, monitor your position closely. You can:

Market conditions change rapidly—active management is crucial.

Step 5: Close or Let It Settle

For delivery contracts, positions auto-settle at expiry. For perpetuals, you decide when to exit. Upon closing, realized P&L is credited to your account balance under “Realized P&L.”

Frequently Asked Questions (FAQ)

Q: What’s the difference between perpetual and delivery contracts?
A: Delivery contracts expire on a set date and settle automatically. Perpetual contracts never expire and use funding rates to stay aligned with spot prices.

Q: How often is funding paid in perpetual contracts?
A: Funding occurs every 8 hours—at 08:00, 16:00, and 24:00 HKT. Only those holding positions at these times receive or pay funding.

Q: Can I switch between isolated and cross margin?
A: Yes, but only when you have no open positions or pending orders.

Q: Are there fees for closing a contract early?
A: No early closure fees. However, standard taker/maker trading fees apply upon execution.

Q: What happens if my position gets liquidated?
A: If your margin falls below the maintenance level, the system will force-close your position to prevent further losses.

Q: Is futures trading suitable for beginners?
A: Due to high leverage and complexity, futures trading is recommended for experienced traders who understand risk controls and market dynamics.

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