Trading a futures contract involves more than just opening a position — understanding what happens while you hold it, and how it eventually closes, is essential to trading futures responsibly.
Key Takeaways
- Perpetual futures have no expiration date and can be held indefinitely, as long as margin requirements continue to be met; traditional futures have a defined expiration date.
- At expiration, a traditional futures contract typically settles in cash for most retail-accessible crypto futures.
- While holding a position, margin requirements must be maintained — falling too low risks a margin call or liquidation.
- Closing a position before expiration typically involves taking an opposite, offsetting trade.
- Understanding a contract’s expiration date, settlement method, and margin requirements before opening a position avoids unpleasant surprises.
Our Take
The distinction between perpetual and expiring futures contracts has real practical implications: a perpetual contract lets you hold a position indefinitely, while an expiring contract forces a decision point that a perpetual contract never requires.
The ongoing margin maintenance requirement while holding any leveraged futures position is the part that catches less experienced traders off guard — a position comfortably margined at opening can become liquidation-eligible after an adverse move.
FAQs
What happens when a traditional futures contract expires?
It typically settles in cash at the agreed-upon price for most retail-accessible crypto futures, rather than requiring physical delivery.
Do perpetual futures ever need to be closed?
Not by a forced expiration — perpetual futures can be held indefinitely as long as margin requirements continue to be met.
📎 Source: Coinbase Learn — Opening, holding, and closing a position in the futures market
