Direct answer
Perpetual futures never expire; funding, settled every 8 hours, keeps the contract near the spot price. A 10x BTC long of 10,000 USDT opened with 1,000 USDT of margin makes 100 USDT on paper when price rises 1%, and reaches its simplified liquidation price after an adverse move of about 9.50%. Taker fees cost about 5 USDT to open and 5 USDT to close, and at +0.01% funding costs about 1 USDT per interval.
Perpetuals, spot and delivery futures compared
Buying spot puts the coin in your account. Buying a perpetual buys a contract that settles profit and loss as the price moves: you never hold the coin, and you can just as easily go short. Delivery futures also offer leverage and shorting, but they expire and settle against the spot index.
What sets the perpetual apart is that it never expires: as long as there is enough margin, the position can stay open. Without an expiry to pull it back to spot, the exchange uses funding to bring the contract price back towards the spot price at regular intervals.
| Item | Spot | Delivery futures | Perpetual futures |
|---|---|---|---|
| Expiry | None | Yes, settled against the spot index | None |
| Short selling | Usually not | Yes | Yes |
| Leverage | No | Yes | Yes |
| Cost of holding | None | Basis paid at entry | Funding every interval |
| Liquidation | No | Yes | Yes |
No expiry: funding keeps the price near spot
Funding is a regular transfer between longs and shorts. When the contract trades above spot the rate is usually positive and longs pay shorts; when it trades below, the rate is negative and shorts pay. Holding the side that pushes the price away from spot becomes more expensive, which pulls it back.
Binance's default is a settlement every 8 hours, at 00:00, 08:00 and 16:00 UTC. OKX's main contracts also settle every 8 hours, and some settle every 1, 2 or 4 hours instead. Funding is paid or received only by positions open at the settlement time.
Margin and leverage: a 10,000 USDT position on 1,000 USDT
A perpetual does not require the full notional, only margin. With 1,000 USDT at 10x leverage the position is worth 10,000 USDT — the size of 0.2 BTC bought at 50,000 USDT.
Profit and loss follow the notional, not the margin: a 1% rise makes this long 100 USDT on paper, which is 10% of the margin, and a 1% fall loses 100 USDT. Leverage magnifies profit, loss and risk; it does not make fees any cheaper.
Mark price and liquidation: when the exchange closes a position
Exchanges decide liquidation on the mark price, which is built on an index of several spot markets so that one abnormal trade cannot trigger it. When the margin balance plus unrealized PnL falls to just the maintenance margin and the liquidation fee, the position is liquidated.
For the 10x long above, with a 0.50% maintenance rate and a 0.05% liquidation-fee reserve, an adverse move of about 9.50% reaches the simplified liquidation price; at 20x the same position has only 4.47% of room.
USDT-margined and coin-margined
Perpetuals come in two kinds. USDT-margined contracts use USDT or USDC as margin and settle profit in the stablecoin. Coin-margined contracts use the coin itself, such as BTC, as margin; each contract has a fixed US dollar face value and profit is paid in the coin. Most people start with USDT-margined contracts because the account is kept in the unit they already think in.
The full cost of one trade
A perpetual trade has three costs: the opening fee, the closing fee and funding while it is held. At a 0.05% taker fee a 10,000 USDT position pays about 5 USDT to open and 5 USDT to close; at +0.01% funding a long pays 1 USDT per interval, or 3 USDT a day at three intervals.
Held for seven days, about 21 settlements, the example long costs 31 USDT in total, of which funding is 21 USDT — already more than the fees. The longer the hold, the more funding becomes the main cost.
Three common misunderstandings
First, higher leverage does not mean bigger profits: for the same position size, leverage changes only the margin tied up and the distance to liquidation. Second, a stop-loss does not prevent liquidation: at high leverage the liquidation price can sit closer than the stop. Third, funding is not an exchange fee: Binance and OKX both state that it passes directly between longs and shorts.
Accounts have limits too: Binance states that since 7 December 2025, futures accounts open for fewer than 30 days can use at most 20x leverage. Rules change, so the exchange's current notice is what applies.
Official sources
Settlement times and the definition of funding come from Binance's and OKX's documentation, the new-account leverage cap from Binance's leverage and margin page, and the mark price from Binance's help page. Account limits can change by region and over time, so the exchange's current notice is what applies. Recorded 2026-10-07.
- Binance: Introduction to Binance Futures Funding Rates
- OKX: Perpetual Futures Guide
- Binance: Leverage and Margin of USDⓈ-M Futures
- Binance: Mark Price and Price Index in USDⓈ-Margined Futures
Keep reading
Frequently asked questions
Do perpetual futures expire?
No. As long as the margin holds and the position is not liquidated, it can stay open indefinitely — although an exchange can delist a contract or change its rules, so keep an eye on its notices while holding.
Are perpetuals the same as futures?
A perpetual is a variant of a futures contract. Like a delivery future it allows leverage and short selling; unlike one, it never expires and uses funding to stay close to the spot price.
Does the exchange collect the funding?
No. Binance and OKX both state that funding passes directly between traders holding longs and shorts and that they take no cut. What the exchange charges is the fee for opening and closing.
What leverage should a beginner use?
There is no standard answer. A safer order is to decide the stop distance and the most you will lose on the trade, size the position with the position size calculator, and then pick leverage that keeps the liquidation price beyond the stop.
Do I pay funding if I hold no position at settlement?
No. Only positions open at the settlement time pay or receive. Binance notes that the actual charge can be up to about 15 seconds off the hour, so take care when opening or closing right around a settlement.