—— How Should Beginners Choose the Right Type of Futures?
After understanding what cryptocurrency futures trading is, many beginners quickly encounter the next question:
Why are there different types of contracts? What exactly is the difference between perpetual futures and delivery futures?
At first glance, these two types of futures appear very similar. Both allow traders to go long or short, both support leverage, and their trading interfaces look almost the same. However, in terms of their underlying mechanisms, design purposes, and use cases, they are fundamentally different.
Understanding these differences not only helps reduce confusion during trading, but also enables beginners to make a more appropriate choice from the very beginning.
What Are Perpetual Futures?
Perpetual futures are currently the most popular and most actively traded future type in the cryptocurrency market. As the name suggests, “perpetual” means that the contract has no expiration date. As long as sufficient margin is maintained, a position can theoretically be held indefinitely.
To ensure that the price of a perpetual future stays closely aligned with the spot market price, exchanges introduce a key mechanism known as the funding rate. The funding rate is not a fee charged by the platform; instead, it is a periodic payment exchanged directly between long and short positions.
- When the market sentiment is predominantly bullish, long positions usually pay funding fees to short positions.
- When the market sentiment is bearish, short positions pay funding fees to long positions.
This mechanism helps keep the perpetual contract price anchored to the spot price over time, preventing excessive price divergence. It is also the core reason why perpetual contracts can exist without an expiration date.
Because there is no settlement or delivery date to consider, perpetual contracts offer greater operational flexibility. They are especially suitable for short-term traders and users who need to enter and exit the market frequently.
What Are Delivery Futures?
Unlike perpetual futures, delivery futures have a fixed expiration date. When a delivery future is created, the settlement and delivery time is predetermined. On the delivery date, all open positions are automatically settled according to predefined rules and can no longer be held.
In the cryptocurrency market, delivery futures are commonly issued on a quarterly basis, such as current-quarter and next-quarter contracts. The settlement price is usually calculated based on an average market price over a certain period before expiration, which helps reduce the impact of short-term price volatility on the final settlement.
Because delivery futures naturally settle at expiration, they do not require a funding rate mechanism to maintain price alignment. This means that as long as a position is not forcibly liquidated, traders do not need to periodically pay or receive funding fees, unlike perpetual contracts.
From a design perspective, delivery contracts are closer to traditional futures contracts in conventional financial markets. They are often used for medium- to long-term strategies, hedging purposes, or structured trading approaches.
Key Differences Between Perpetual and Delivery Contracts
The most fundamental differences between perpetual contracts and delivery contracts can be summarized in two aspects:
whether the contract has an expiration date, and whether a funding rate mechanism exists.
Perpetual contracts have no expiration date, allowing traders on platforms like BitMart to hold positions flexibly based on market conditions. However, traders must continuously monitor funding rate changes. Delivery contracts, on the other hand, have a fixed settlement date. They are suitable for traders who plan their trading cycles in advance, but positions are automatically settled upon expiration and cannot be carried forward.
In terms of pricing behavior, perpetual contracts are designed to closely track spot prices, while delivery contract prices may trade at a premium or discount depending on market expectations. This price difference can create opportunities for arbitrage or hedging strategies, but it also raises the learning curve for traders.
Which Type of Contract Is More Suitable for Beginners?
For beginners who are new to futures trading, perpetual contracts are generally easier to understand and use. Their rules are more intuitive, there is no need to worry about expiration dates or contract rollovers, and liquidity is usually deeper. Overall, the trading experience is closer to that of spot trading.
Although delivery contracts are more “traditional” and structurally stable, they involve concepts such as settlement cycles, contract switching, and price premiums. These factors increase the complexity for beginners. Entering delivery contracts without a solid understanding of basic contract mechanics can easily lead to confusion.
Ultimately, the choice of contract type depends on the trader’s time horizon, risk tolerance, and trading objectives. The key question is not “which contract is more advanced,” but rather “which contract is more suitable for my current stage.” On platforms like BitMart that offer multiple contract types, beginners often start with perpetual contracts and gradually explore delivery contracts after becoming familiar with contract rules and risk management.
Understanding Contract Types Is the First Step in Risk Management
Whether perpetual contracts or delivery contracts, both are simply trading tools. What truly determines trading outcomes is the trader’s understanding of the rules and ability to manage risk.
Before entering the contract market, clearly distinguishing between different contract types and understanding their design logic and applicable scenarios is a crucial step in avoiding blind or impulsive trading. Only by fully understanding the rules can futures trading become a controllable trading method, rather than a source of fear driven by high risk.
