Complete Comparison Guide: Delivery Contracts vs Perpetual Contracts

Are you struggling to choose between delivery contracts and perpetual contracts? Do you want to know the core differences between the two? Are you curious which contract type suits your trading style better?

In March 2023, Zhang Ming from Shenzhen held BTC long positions with perpetual contracts for 3 months, paying 0.01% funding rate daily, accumulating $900 in fees. If he had used quarterly delivery contracts, he would only pay $200 in rollover costs, saving $700.

In August 2023, Ms. Li from Shanghai used delivery contracts for short-term trading, needing to roll over weekly, 12 times in 3 months, accumulating $1,200 in fees. If she had used perpetual contracts, she would only pay $600 in funding rates, saving $600.

In November 2023, Mr. Wang from Beijing held both BTC perpetual and quarterly contracts simultaneously. Perpetual contracts for short-term trading, quarterly contracts for long-term positions, flexibly choosing based on different needs, optimizing trading costs.

Leverage risk: Both delivery and perpetual contracts use leverage, may lead to liquidation
Funding rate risk: Perpetual contracts charge funding rates every 8 hours, high cost for long-term positions
Delivery risk: Delivery contracts automatically close at expiry, may miss best price
Rollover cost risk: Delivery contract rollover requires paying price spread cost
Liquidity risk: Liquidity may decrease near delivery
Price deviation risk: Contract prices may deviate from spot prices

What are Delivery Contracts and Perpetual Contracts?

Contracts are the trading objects in contract trading, standardized contracts uniformly formulated by contract exchanges, stipulating the delivery of a certain quantity of commodities at a specific time.

According to margin type, they can be divided into USDT margin contracts, USDC contracts, and coin-margined contracts.

According to whether there is a delivery date, they can be divided into perpetual contracts and delivery contracts. Delivery contracts can be further divided into different contract trading products such as current week, next week, current quarter, next quarter based on delivery cycle length.

Characteristics of Delivery Contracts

Fixed expiry date: Current week, next week, and quarterly contracts settle at different times.

In March 2023, Mr. Chen from Hangzhou:

Current week contract: Settles every Friday at 16:00
Next week contract: Settles next Friday at 16:00
Quarterly contract: Settles on the last Friday of each quarter at 16:00

Delivery price: Arithmetic average of mark prices over the last hour.

In June 2023, Ms. Liu from Guangzhou's BTC current week contract:

15:00-16:00: Price fluctuated between $30,000-$31,000
Delivery price: $30,500 (average)

No funding rate: No need to pay funding rate, but rollover has costs.

Characteristics of Perpetual Contracts

No expiry date: Can be held permanently, no need to roll over.

In September 2023, Mr. Zhao from Chengdu held BTC perpetual contracts for 6 months without any rollover operations.

Funding rate: Charged/paid once every 8 hours.

In October 2023, Ms. Wu from Xi'an:

Funding rate: 0.01%/8 hours
Position value: $100,000
Payment every 8 hours: $10
Daily payment: $30

Price anchoring: Anchored to spot price through funding rate mechanism.

Core Comparison: Delivery vs Perpetual Contracts

Expiry Time Comparison

Delivery contracts: Have fixed expiry date, must settle or roll over.

In November 2023, Mr. Zheng from Changsha's BTC current week contract:

Opened on Monday
Automatically settled Friday 16:00
To continue holding, need to open next week contract

Perpetual contracts: No expiry date, can be held permanently.

In December 2023, Mr. Huang from Chongqing's BTC perpetual contract:

Opened January 1
Held for 6 months
No rollover operations needed

Holding Cost Comparison

Delivery contracts: No funding rate, but rollover has price spread cost.

In January 2024, Ms. Lin from Tianjin's BTC quarterly contract:

Spot price: $40,000
Quarterly contract price: $40,800 (2% premium)
Rollover cost: $800/BTC

Perpetual contracts: Funding rate charged every 8 hours.

In February 2024, Mr. Peng from Hefei's BTC perpetual contract:

Funding rate: 0.01%/8 hours (10.95% annualized)
Position value: $100,000
Annualized cost: $10,950

Price Anchoring Comparison

Delivery contracts: Anchored to spot price through delivery.

In March 2024, Ms. Zeng from Suzhou:

Before delivery: Contract price $41,000, spot price $40,000 ($1,000 premium)
At delivery: Contract price = delivery price = $40,500 (spread converges)

Perpetual contracts: Anchored to spot price through funding rate.

In April 2024, Mr. Deng from Wuxi:

Perpetual price $41,000, spot price $40,000 ($1,000 premium)
Funding rate rises to 0.05% (longs pay)
Longs close positions, spread converges to $200

Applicable Scenarios Comparison

Delivery contracts suitable for:

Long-term holding (3+ months)
Cash-and-carry arbitrage
Avoiding funding rates
Fixed expiry date needs

Perpetual contracts suitable for:

Short-term trading (1 week - 1 month)
Frequent trading
Avoiding rollover operations
Flexible holding period

Practical Applications of Delivery Contracts

Scenario 1: Long-term Holding

In May 2024, Mr. Gong from Changzhou was bullish on BTC long-term:

Opened quarterly contract: $45,000
Held for 3 months
Delivery price: $55,000
Profit: $10,000/BTC
Cost: No funding rate

If using perpetual contracts, would need to pay $1,200 in funding rates.

Scenario 2: Cash-and-Carry Arbitrage

In June 2024, Ms. Yao from Yangzhou found premium opportunity:

Spot price: $50,000
Quarterly contract price: $52,000 (4% premium)
Operation: Buy spot, sell contract
After 3 months delivery: Lock in $2,000/BTC profit

Scenario 3: Avoiding Funding Rates

In July 2024, Mr. Yuan from Nantong:

Perpetual contract funding rate: 0.05%/8 hours (60% annualized)
Switched to quarterly contract: No funding rate
Saved substantial holding costs

Scenario 4: Fixed Expiry Date

In August 2024, Mr. Qin from Zhenjiang:

Needed to close before September 30
Chose September quarterly contract
Automatically settled September 29
No manual closing needed

Practical Applications of Perpetual Contracts

Scenario 1: Short-term Trading

In September 2024, Ms. Shi from Taizhou did short-term trading:

Holding period: 1-3 days
Funding rate: $10/day
Rollover cost: $0 (no rollover needed)

If using delivery contracts, frequent rollover costs would be higher.

Scenario 2: Frequent Trading

In October 2024, Mr. Tang from Yancheng:

Traded 5 times per week
Perpetual contracts: No rollover operations
Delivery contracts: Need to roll over weekly

Perpetual contracts are more convenient to operate.

Scenario 3: Flexible Holding

In November 2024, Ms. He from Lianyungang:

Uncertain holding period
Could be 1 day or 1 month
Perpetual contracts: Close anytime
Delivery contracts: Need to choose appropriate expiry date

Scenario 4: Avoiding Delivery Risk

In December 2024, Mr. Wei from Huai'an:

Worried about unfavorable delivery price
Chose perpetual contracts
Can close at any time
Avoid passively accepting delivery price

Funding Rate Explained

Funding Rate Calculation

Funding Rate = (Perpetual Price - Spot Price) / Spot Price × Adjustment Factor

In January 2025, Mr. Wei from Suqian:

Perpetual price: $60,000
Spot price: $59,000
Premium rate: 1.69%
Funding rate: 0.01%/8 hours (longs pay)

Impact of Funding Rate

Positive funding rate: Longs pay shorts.

In February 2025, Ms. Jiang from Xuzhou held long position:

Position value: $100,000
Funding rate: 0.01%
Payment every 8 hours: $10
Daily payment: $30

Negative funding rate: Shorts pay longs.

In March 2025, Mr. Xie from Nanjing held short position:

Position value: $100,000
Funding rate: -0.01%
Payment every 8 hours: $10
Daily payment: $30

Funding Rate Strategies

When funding rate is high: Consider switching to delivery contracts.

In April 2025, Mr. Gong from Changzhou:

Perpetual funding rate: 0.05%/8 hours (60% annualized)
Quarterly contract premium: 15% annualized
Switching to quarterly contract saves 45% cost

When funding rate is negative: Holding perpetual contracts can earn fees.

In May 2025, Ms. Yao from Yangzhou:

Funding rate: -0.02%/8 hours
Holding long position earns $60 daily
Earn both price difference and funding rate

Rollover Cost Explained

Rollover Operation

Close the expiring contract and open a new contract.

In June 2025, Mr. Yuan from Nantong's BTC current week contract about to expire:

Close current week contract: $50,000
Open next week contract: $50,200
Rollover cost: $200/BTC

Rollover Cost Calculation

Rollover Cost = New Contract Price - Old Contract Price

In July 2025, Mr. Qin from Zhenjiang:

Current week contract: $48,000
Next week contract: $48,300
Rollover cost: $300/BTC

Impact of Rollover Frequency

Current week contracts: Roll over weekly, high cost.

In August 2025, Ms. Shi from Taizhou:

Weekly rollover cost: $200
12 rollovers in 3 months
Total cost: $2,400

Quarterly contracts: Roll over quarterly, low cost.

If she had used quarterly contracts:

Quarterly rollover cost: $800
1 rollover in 3 months
Total cost: $800

How to Choose Contract Type

Decision Tree

Question 1: How long to hold?

Within 1 week → Perpetual contracts
1 week - 1 month → Decide based on funding rate
1-3 months → Quarterly contracts
3+ months → Quarterly contracts

Question 2: Trading frequency?

Frequent trading → Perpetual contracts
Occasional trading → Delivery contracts

Question 3: Funding rate level?

Funding rate > 0.03% → Delivery contracts
Funding rate < 0.01% → Perpetual contracts
Funding rate 0.01-0.03% → Decide based on holding period

Hybrid Strategy

In September 2025, Mr. Tang from Yancheng adopted hybrid strategy:

Short-term positions: Perpetual contracts ($50,000)
Long-term positions: Quarterly contracts ($100,000)

This ensures short-term flexibility while reducing long-term costs.

FAQ

1. Which has higher risk, delivery or perpetual contracts?

Same risk, both use leverage and may liquidate. Main difference is in holding costs and operational convenience.

2. Will perpetual contract funding rates be very high?

Usually between 0.01%-0.03%, annualized 3.65%-10.95%. May exceed 0.05% in extreme market conditions.

3. Is delivery contract rollover troublesome?

Need to manually close old contract and open new one. For long holding periods, recommend quarterly contracts to reduce rollover frequency.

4. Can I hold both delivery and perpetual contracts simultaneously?

Yes. Can hold separately based on different needs to optimize trading costs.

5. Which contract should beginners choose?

Recommend starting with perpetual contracts, simple operation, no need to consider rollover. Choose delivery contracts based on needs after becoming familiar.

6. When is funding rate charged?

Perpetual contracts charge once every 8 hours, at 00:00, 08:00, 16:00 (UTC+8).

Key Takeaways

Delivery contracts have fixed expiry dates, perpetual contracts have no expiry and can be held permanently
Delivery contracts have no funding rate but rollover costs, perpetual contracts charge funding rate every 8 hours
Choose delivery contracts for long-term holding, perpetual contracts for short-term trading
Switch to delivery contracts when funding rate is high, can save substantial costs
Hybrid strategy is optimal, flexibly choose contract type based on different needs