What is the difference between a delivery contract and a perpetual contract

Perpetual contracts differ from delivery contracts in that they settle in cash instead of delivering the underlying cryptocurrency on a fixed date.

Oct 25, 2024 at 04:08 pm

What is the Difference Between a Delivery Contract and a Perpetual Contract?

In the world of cryptocurrency trading, there are two common types of contracts: delivery contracts and perpetual contracts. While both types of contracts allow traders to speculate on the price of a cryptocurrency, there are some key differences between them.

1. Underlying Asset

Delivery contracts: Represent the physical delivery of the underlying cryptocurrency on a specified date.
Perpetual contracts: Do not represent the physical delivery of the underlying cryptocurrency and instead settle in cash.

2. Settlement Date

Delivery contracts: Have a fixed settlement date on which the underlying cryptocurrency is delivered.
Perpetual contracts: Do not have a settlement date and can be held indefinitely.

3. Funding Rate

Delivery contracts: Do not have a funding rate.
Perpetual contracts: Have a funding rate that is paid periodically to keep the contract price in line with the spot market.

4. Risk

Delivery contracts: Carry the risk of the underlying cryptocurrency not being delivered on the settlement date.
Perpetual contracts: Carry the risk of the funding rate fluctuating, which can lead to losses or profits.

5. Suitability

Delivery contracts: Are suitable for traders who want to take delivery of the underlying cryptocurrency or hedge against the risk of a physical delivery.
Perpetual contracts: Are suitable for traders who want to speculate on the price of a cryptocurrency without the risk of physical delivery or settlement.

6. Examples

Delivery contracts: CME Bitcoin Futures, Bakkt Bitcoin Monthly Futures
Perpetual contracts: Binance Futures, OKX Perpetual Swap, FTX (now bankrupt)

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research！

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

Fear & Greed Index

Trade Now

Biggest Gainers

GOHOME

$316.6282

153.13%

Trade Now
SOS

$0.2100

88.30%

Trade Now
RED

$0.6749

29.77%

Trade Now
BNX

$1.0400

26.97%

Trade Now
ZRO

$2.2221

25.37%

Trade Now
PIN

$0.9493

24.33%

Trade Now

Latest Crypto News

Dogecoin (DOGE) Price Prediction: DOGE Prepares For A Major Rebound, Targeting $4
2025-03-15 17:45:54
Dogecoin (DOGE) Is Retesting The Lower Bound Of An Ascending Channel
2025-03-15 17:45:54
Key highlights:
2025-03-15 17:45:54
Bitcoin’s Spirited Resurgence Signals a New Era for Cryptocurrencies
2025-03-15 17:45:54
XRP Price Maintains an Ascending Trend After the Rebound
2025-03-15 17:45:54
XRPTurbo: Revolutionizing the XRP Ledger Ecosystem with a Comprehensive Suite of DApps
2025-03-15 17:45:54

Related knowledge

What are the advantages of smart contracts?

Mar 14,2025 at 11:51pm

Key Points:Enhanced Security: Smart contracts minimize the risk of fraud and human error through automated execution.Increased Transparency: All transactions and contract terms are publicly viewable on the blockchain, fostering trust and accountability.Automation & Efficiency: Smart contracts automate processes, eliminating intermediaries and speeding u...

What are the application scenarios of smart contracts?

Mar 13,2025 at 03:26pm

Key Points:Smart contracts automate agreements, removing intermediaries.Diverse applications across DeFi, NFTs, supply chain management, and more.Security and scalability remain key challenges.Understanding the underlying blockchain technology is crucial for effective implementation.Legal frameworks are still evolving to accommodate smart contract dispu...

What is the role of a smart contract in blockchain?

Mar 15,2025 at 01:40pm

Key Points:Smart contracts automate the execution of agreements on a blockchain.They eliminate intermediaries and increase transparency and efficiency.Smart contracts enhance security through cryptographic hashing and immutability.Various types of smart contracts exist, catering to diverse applications.Risks associated with smart contracts include vulne...

What are the main features of a smart contract?

Mar 13,2025 at 10:20pm

Key Points:Smart contracts automate the execution of agreements. Their core functionality relies on pre-defined conditions and cryptographic security.Immutability and transparency are key features, ensuring that once deployed, the contract's code cannot be altered without consensus (depending on the blockchain), and all transactions are viewable on the ...

How does a smart contract work?

Mar 13,2025 at 09:05pm

Key Points:Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.They operate on a blockchain, ensuring transparency, security, and immutability.Deployment involves writing code, compiling it, and deploying it to a blockchain network.Execution is triggered by pre-d...

What is the settlement method of DOGE contract?

Mar 14,2025 at 09:30am

Key Points:Dogecoin (DOGE) contract settlement methods primarily depend on the exchange or platform offering the contract.Perpetual contracts typically use a mark price for settlement, avoiding the need for physical delivery of DOGE.Delivery contracts require the actual delivery of DOGE at contract expiration.Understanding the specific settlement mechan...