Crypto Futures Contracts
Understand dated crypto futures, fixed maturity, contract notional, margin, long-short exposure, basis and settlement differences.
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A dated crypto futures contract creates long or short exposure to an underlying cryptoasset until a specified maturity. Unlike a perpetual, it has an expiry date, so its price can trade above or below spot and then converges toward the venue's settlement reference as expiry approaches.
Core concept
A futures contract specifies the underlying reference, contract size, expiry, settlement method and margin rules. Traders can buy (long) or sell (short) the contract without necessarily owning or borrowing the underlying asset directly.
The futures price reflects spot expectations plus financing, positioning, convenience, borrow constraints and risk premia. It is therefore normal for a dated futures price to differ from spot before expiry.
At or near expiry, the contract's economic value becomes tied to its settlement reference. Cash-settled crypto futures resolve P&L in the settlement asset rather than delivering physical coins, while physically delivered structures can operate differently.
How the mechanics fit together
Contract multiplier
Converts quoted futures price into notional exposure.
Expiry
Date/time after which the contract is settled or delivered.
Settlement reference
Index or auction used to determine final value.
Margin
Collateral posted to support open exposure.
Basis
Difference between futures price and spot/reference price.
Position lifecycle
Open, offset before expiry, roll, or hold into settlement.
Comparison framework
| Feature | Dated futures | Perpetual futures | Spot |
|---|---|---|---|
| Expiry | Fixed date | None | None |
| Funding | Usually no perpetual-style funding | Common | No derivative funding |
| Basis convergence | Into settlement | Managed via funding/mark design | Not applicable |
| Roll needed | If exposure continues past expiry | No scheduled roll | No |
| Ownership | Derivative claim | Derivative claim | Underlying asset |
Worked example
BTC spot is £80,000 and a three-month futures contract trades at £82,000. The £2,000 premium is positive basis. A trader who buys one BTC-equivalent future is exposed to changes in the futures price, not simply spot. If the future later trades at £81,000 while spot remains £80,000, the long has lost £1,000 on the contract even though spot did not move, because the basis narrowed.
Risk map
Basis risk
Futures can move relative to spot before expiry.
Expiry risk
Liquidity can migrate and volatility can change near settlement.
Reference risk
Final P&L depends on the settlement methodology.
Margin/liquidation
Leveraged exposure can be closed before expiry if margin is insufficient.
Common mistakes and misunderstandings
- Assuming dated futures equal spot plus a fixed interest rate.
- Ignoring contract multiplier or expiry month.
- Treating positive basis as guaranteed profit.
- Holding into expiry without knowing settlement methodology.
- Assuming all crypto futures are cash-settled.
Practical analysis workflow
- Read contract multiplier, quote convention and settlement asset.
- Confirm exact expiry timestamp and settlement reference.
- Calculate full money notional and margin exposure.
- Track spot-futures basis separately from directional P&L.
- Decide in advance whether to close, roll or hold through settlement.
Knowledge checkpoint
These questions are specific to Crypto Futures Contracts.
Q1. How can a futures long lose money while spot is unchanged?
Q2. Why should notional exposure be calculated before evaluating margin?
Q3. What happens to basis as a well-designed futures contract reaches its settlement reference?
Q4. Which contract specification determines whether coins are delivered or cash P&L is settled?
FAQ
❓ Do dated futures require funding payments?
They typically do not use perpetual-style periodic funding because expiry provides a convergence mechanism, though financing is embedded in basis.
❓ Can I close before expiry?
Usually yes if liquidity is available; an offsetting trade closes or reduces the position.
❓ Do futures always deliver crypto?
No. Many are cash-settled, but product design varies.
❓ Why does a future differ from spot?
Financing, positioning, borrow constraints, expectations and risk premia can create basis.
Summary
- Dated futures are derivative contracts with a fixed maturity.
- Basis can change even when spot is unchanged.
- Expiry creates a natural convergence mechanism absent from perpetuals.
- Contract size, settlement method and margin rules must be read before trading.
This building block is educational. It explains market structure and risk; it is not a recommendation to use derivatives or leverage.
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