Binance Perpetual Futures are the most traded crypto derivatives globally – contracts that never expire, letting you hold positions indefinitely while tracking spot prices through the funding rate mechanism. This guide covers everything about Binance perpetuals: how they work, funding rate calculations, USDⓈ-M vs COIN-M contracts, and why traders prefer them over quarterly futures.
📊 Product Review
✓ Updated Dec 2025
⚡ TL;DR: Binance Perpetual Futures
✓ Why Perpetuals: No expiry management, no rollover needed, 24/7 continuous trading, closely tracks spot price via funding rate
🚀 Trade Binance Perpetual Futures (20% Fee Discount)
✓ Never expires · ✓ Deep liquidity · ✓ Up to 125x leverage
📑 Table of Contents
What are Binance Perpetual Futures?
Perpetual futures are a type of derivative contract that allows you to speculate on cryptocurrency prices without an expiration date. Unlike traditional futures that settle on a specific date, perpetual contracts can be held indefinitely – you decide when to close your position.
This innovation originated in cryptocurrency markets (popularized by BitMEX) and has become the dominant form of crypto derivatives trading. Binance Perpetual Futures account for the majority of trading volume on Binance Futures platform.
No Expiration
Hold positions forever (as long as margin is maintained). No delivery or settlement dates to track.
Funding Rate
Periodic payments between longs and shorts to keep price aligned with spot market.
Tracks Spot Price
Uses Mark Price (fair value) to prevent manipulation and ensure accurate liquidations.
How Binance Perpetual Futures Work
When you trade perpetual futures on Binance, you’re betting on whether an asset’s price will go up or down. You don’t own the actual cryptocurrency – you hold a contract that tracks its price.
🔄 Perpetual Futures Mechanism
1
Open Position
Go Long (expect price UP) or Short (expect price DOWN) with your chosen leverage.
2
Pay/Receive Funding
Every 8 hours, funding is exchanged between longs and shorts based on market conditions.
3
Hold Indefinitely
No expiry date – hold as long as you maintain required margin and aren’t liquidated.
4
Close When Ready
Close position anytime to realize PnL. No settlement or delivery required.
📌 Important: Mark Price vs Last Price
Binance uses two prices for perpetual futures:
- Last Price: The most recent traded price on Binance
- Mark Price: Fair value calculated from multiple spot exchanges (used for liquidations)
- Why it matters: Liquidations are triggered by Mark Price to prevent manipulation and unfair liquidations during volatile periods
Funding Rate Explained
The funding rate is the core mechanism that keeps perpetual futures prices aligned with spot prices. It’s a periodic payment exchanged between long and short traders – Binance doesn’t profit from funding fees.
⏰ Funding Settlement Times (UTC)
00:00
UTC
08:00
UTC
16:00
UTC
Note: Some volatile altcoins have more frequent funding (every 4 hours or 2 hours). Check the funding countdown on each contract.
📈 Positive Funding Rate
When perpetual price > spot price (bullish market)
Longs PAY → Shorts RECEIVE
Incentivizes traders to short, pushing price down toward spot
📉 Negative Funding Rate
When perpetual price < spot price (bearish market)
Shorts PAY → Longs RECEIVE
Incentivizes traders to long, pushing price up toward spot
🔢 Funding Fee Calculation
Funding Fee = Position Value × Funding Rate
Example:
- Position: $100,000 BTCUSDT Long
- Funding Rate: 0.01% (positive)
- You PAY: $100,000 × 0.01% = $10 every 8 hours
💡 Pro Tip: Default interest rate on Binance is 0.03% daily (0.01% per 8h interval). In extreme markets, funding can spike to ±2% or even ±3% per interval!
USDⓈ-M vs COIN-M Perpetual Contracts
Binance offers two types of perpetual futures contracts. The main difference is what you use as margin (collateral) and how profits are settled.
✅ Recommendation
Use USDⓈ-M Perpetuals for most trading. Easier to calculate PnL, more trading pairs, supports Multi-Asset Mode (use BTC as collateral for any pair). Use COIN-M if you want to keep your profits in BTC/ETH without converting to stablecoins.
Perpetual vs Quarterly Futures
Binance offers both perpetual and quarterly futures. Here’s how they compare:
✓ Choose Perpetual When:
- Short-term to medium-term trades
- You want flexibility without expiry management
- Trading altcoins (only perpetuals available)
- Funding rate is low or in your favor
◉ Choose Quarterly When:
- Long-term positions (3+ months)
- Want to avoid funding fees entirely
- Hedging large spot holdings
- Trading only BTC or ETH
Key Features of Binance Perpetual Futures
Multi-Asset Mode
Use BTC, ETH, or other assets as margin for any USDⓈ-M contract. No need to convert to USDT.
Hedge Mode
Hold both long and short positions simultaneously on the same contract.
TP/SL Split Target
Set up to 4 different take profit and stop loss levels for partial position exits.
500+ Trading Pairs
Trade majors, altcoins, memes, AI tokens – new listings added regularly with up to 75x leverage.
Insurance Fund
SAFU fund protects against socialized losses and auto-deleveraging during extreme volatility.
Instant Listing
New perpetual contracts often listed before spot, allowing early exposure to trending tokens.
Pros & Cons
✅ Pros
- No expiration – Hold positions indefinitely
- No rollover – No manual contract management
- Tracks spot closely – Funding keeps price aligned
- High liquidity – Tight spreads, low slippage
- 500+ pairs – Trade any crypto you want
- Flexible leverage – Up to 125x on majors
- Earn funding – Get paid when on favorable side
❌ Cons
- Funding costs – Can add up over time
- High leverage risk – Easy to get liquidated
- Complexity – More mechanics to understand
- Not available in US – Regulatory restrictions
- Volatile funding – Spikes during extreme markets
- 24/7 monitoring – Markets never close
Ready to Trade Binance Perpetual Futures?
Join the world’s most liquid crypto derivatives platform with 500+ perpetual contracts.
Frequently Asked Questions
What happens if I hold a perpetual position during funding?
If you have an open position at the funding time (00:00, 08:00, or 16:00 UTC), you will either pay or receive the funding fee. If you close your position before the funding time, you won’t pay or receive anything.
Can funding rates be negative?
Yes! When funding is negative, shorts pay longs. This happens when perpetual price trades below spot (bearish sentiment). You can actually earn money by holding a long position during negative funding.
How high can funding rates go?
Default funding is capped at the maintenance margin ratio (usually ±0.75% to ±3% depending on the contract). During extreme volatility, funding can reach ±2% or even ±3% per 8 hours – that’s up to 9% daily!
Should I use USDⓈ-M or COIN-M perpetuals?
USDⓈ-M for most traders – easier to calculate PnL, more pairs, Multi-Asset Mode. Use COIN-M only if you want to keep profits in BTC/ETH without converting to stablecoins.
Are Binance perpetual futures available in the US?
No. US residents cannot access Binance Futures due to regulatory restrictions. Alternatives include Kraken Futures or regulated CME Bitcoin futures.
What’s the difference between perpetual and delivery futures?
Perpetual: No expiry, uses funding rate, most popular. Delivery (Quarterly): Expires every 3 months, no funding fees, auto-settles at expiration. Most traders prefer perpetuals for flexibility.
📌 Binance Perpetual Futures: Summary
Expiration
Never ∞
Funding
Every 8h
Max Leverage
125x
Trading Pairs
500+
Related Binance Guides
⚠️ Risk Disclaimer
Perpetual futures trading involves substantial risk. You can lose more than your initial investment. Leverage amplifies both profits and losses. Funding fees can accumulate over time. Past performance is not indicative of future results. Only trade with money you can afford to lose.
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