The quarterly and perpetual futures are the two main types of cryptocurrency futures trading. Here, we will be learning the differences between them.
Some futures contracts will automatically "roll over" to the following contract upon expiration. This implies that open positions are essentially carried over to the subsequent contract when the present one ends. In truth, perpetual futures contracts operate in a manner very similar to this—they just don't do so on a quarterly basis. However, with Binance quarterly futures, this is not the case. When the expiration date arrives, the quarterly contracts settle in BTC at the hourly average price.
Unlike perpetual futures, quarterly futures' price index is based on the BTC/USD market rather than the BTC/USDT market. This enables traders to insure against the possibility of the USDT decoupling from the USD.
A rolling average of the BTC/USD market price on Bitstamp, Coinbase Pro, Kraken, Bittrex, and Binance exchanges makes up the index price. The index evenly weights each of these markets. To determine the Mark Price, which is utilized for liquidations, this index is used. Have a question about the Mark Price? Take a look at the chapter about it in our futures guide.
The costs you'll incur are another significant distinction. A financing cost of $8 every eight hours must be paid if you trade perpetual futures. To keep the price of perpetual futures markets near to the spot price, market participants exchange funding payments. It's paid between traders, so imagine it as something akin to interest rate.
Long positions pay short positions when funding is positive, while short positions pay long positions when funding is negative. However, there are no funding fees for quarterly futures. Because the funding fee won't gradually reduce the position in smaller amounts over time, they are good for longer-term holding. Perpetual futures, however, might be a better option for you if you prefer short-term trading. Your risk tolerance and trading approach both play a role.
https://academy.binance.com/en/articles/a-guide-to-trading-binance-quarterly-futures-contract