Skip to main content

In What Scenario Would a Traditional Futures Contract Be Preferred over a Perpetual One?

A traditional futures contract would be preferred by institutional traders or hedgers who require a fixed, guaranteed settlement price on a specific future date. This is crucial for planning and risk management, especially when the underlying asset is intended for future use or delivery.

They also prefer the certainty of no funding rate payments, which can be unpredictable.

How Does a Perpetual Future Differ from a Traditional Futures Contract?
If a Future Settles on December 31st, When Is the Gain or Loss Realized for Tax Purposes?
What Is ‘Time-Weighted Average Price’ (TWAP) and When Is It Preferred over VWAP?
How Does a Futures Contract on Electricity Prices Affect a Miner’s Profitability Strategy?