Perpetual vs. Delivery Futures: Which Should Beginners Start With?

There's More Than One Type of Futures Contract

When browsing the Binance futures trading interface, you may notice that a single asset has several contract options — some labeled "Perpetual" and others with a specific date like "0328" or "0627." The former are perpetual contracts, and the latter are delivery contracts.

They trade in similar ways, but their underlying mechanics differ significantly. Choosing the wrong one won't immediately cost you money, but it could lead to unexpected holding costs or expiry risks.

Perpetual Contracts: Futures Without an Expiry Date

Key Characteristics

As the name suggests, perpetual contracts have no expiration date. You can open a position at any time and close it at any time — theoretically holding it forever, as long as your margin holds up.

Price Anchoring Mechanism

Since there's no expiry settlement, perpetual contracts use a funding rate to keep the contract price from drifting too far from the spot price. Every eight hours, long and short positions exchange payments based on market conditions.

Liquidity

Perpetual contracts have the highest trading volume among Binance derivatives, with excellent liquidity. BTC and ETH perpetual contracts have very deep order books, and even large trades rarely cause significant slippage.

Delivery Contracts: Futures With an Expiry Date

Key Characteristics

Delivery (or quarterly) futures contracts have a specific expiration date, usually at the end of a quarter. For example, "BTCUSDT 0328" is a BTC contract expiring on March 28. At expiry, the contract is automatically settled at the settlement price and your position is force-closed.

Price Characteristics

There's a "basis" between the delivery contract price and the spot price. Generally, the further away the expiry date, the larger the basis. As expiry approaches, the contract price gradually converges to the spot price, and they align at expiry.

No Funding Rate

One of the biggest advantages of delivery contracts is they don't charge a funding rate. Because the expiry settlement mechanism anchors the price, the funding rate adjustment tool isn't needed. For traders holding positions long-term, this is a real cost savings.

Key Differences Compared

Holding Duration

Perpetual contracts have no time limit — you can hold indefinitely. Delivery contracts must be settled at expiry. If you want to maintain the same directional exposure, you need to manually open a new contract (a process called "rolling over").

Holding Costs

Perpetual contracts require funding rate payments every eight hours. Delivery contracts have no funding rate — the only cost is the opening fee.

Price Deviation

Perpetual contract prices stay very close to spot prices, with usually minimal deviation. Delivery contract prices can differ from spot by dozens or even hundreds of points, especially when the expiry date is far away.

Operational Complexity

Perpetual contracts are simple — open a position and forget about expiry. Delivery contracts require monitoring the expiry date and either closing or rolling over before it arrives.

Liquidity

Perpetual contracts have far better liquidity than delivery contracts. Delivery contract liquidity weakens as expiry approaches, and longer-dated contracts have even less.

Which Should Beginners Choose

For the vast majority of beginners, perpetual contracts are the most sensible choice. Here's why:

First, better liquidity means you're unlikely to face execution difficulties or extreme slippage.

Second, no expiry concerns make position management simpler.

Third, prices closely track spot, making market analysis more intuitive.

Fourth, the overwhelming majority of Binance tutorials and discussions focus on perpetual contracts, so there are more learning resources available.

After signing up for a Binance account through Binance official, the default futures trading interface is the perpetual contract — this is also the type the platform recommends for beginners.

When to Consider Delivery Contracts

Long-Term Positions With Clear Direction

If you have a fairly confident view on the trend over the next quarter and plan to hold through, delivery contracts cost less — because there are no funding rate payments.

When Funding Rates Are Abnormally High

Sometimes the market overheats and perpetual funding rates spike to 0.1% or even higher. In this scenario, if you're going long, switching to delivery contracts lets you avoid that hefty fee.

Basis Arbitrage

Some professional traders exploit the basis between perpetual and delivery contracts for arbitrage — opening opposing positions when the basis is large and profiting as it converges. This is a low-risk strategy, but requires significant capital and operational experience.

How to Switch Between Them in Practice

In the Binance App, enter the futures trading interface and tap the trading pair name. In the dropdown list, you'll see both perpetual and various delivery contracts for the same asset. Select the contract type you want to trade. If you haven't installed the App yet, download it through Binance official.

Summary

Can You Use Both Types Simultaneously

Absolutely. Experienced traders choose different contract types for different purposes. For example, short-term trades use perpetual contracts for better liquidity, while long-term directional positions use delivery contracts to avoid funding rates. Some even open opposing positions on perpetual and delivery contracts simultaneously for basis arbitrage.

However, for beginners, managing two types of contracts at once adds complexity. It's better to focus on one type first and expand to the other once you're fully comfortable.

Perpetual contracts are simple and flexible but have holding costs; delivery contracts have no holding costs but are more complex to manage. Start with perpetual contracts, and once you have a deeper understanding of the market, decide based on your specific trading strategy whether to also use delivery contracts. Whichever you choose, risk management always comes first.