What is the difference between OKX perpetual swaps and expiry futures?

OKX perpetual swaps offer indefinite holding with funding rates every 8 hours, while expiry futures settle at a fixed date without funding, ideal for hedging or spreads.

Aug 10, 2025 at 08:15 pm

Understanding OKX Perpetual Swaps

Perpetual swaps on OKX are derivative contracts that allow traders to speculate on the price of a cryptocurrency without owning the underlying asset. Unlike traditional futures, these contracts do not have an expiration date, enabling traders to hold positions indefinitely. This feature makes them particularly appealing for both short-term and long-term trading strategies. Each perpetual swap is typically collateralized in a specific cryptocurrency, such as USDT or the base token like BTC.

One of the defining mechanisms of perpetual swaps is the funding rate. To keep the swap price aligned with the spot market, OKX periodically exchanges payments between long and short positions. When the funding rate is positive, longs pay shorts; when negative, shorts pay longs. These payments occur every eight hours, and the rate is determined by the difference between the perpetual contract price and the underlying index price. Traders must monitor the funding rate, as it can impact profitability over time, especially in highly skewed markets.

Leverage is a key feature of perpetual swaps. OKX allows users to trade with up to 125x leverage, depending on the asset and contract type. Higher leverage amplifies both gains and losses, so risk management is essential. Positions are subject to liquidation if the margin balance falls below the maintenance threshold. OKX provides a liquidation price calculator within its interface, helping traders anticipate potential liquidation levels.

How OKX Expiry Futures Work

Expiry futures on OKX are futures contracts with a fixed settlement date. Once the contract reaches its expiration, it is automatically settled based on the average price of the underlying asset over a predefined period. These contracts are available in quarterly and bi-weekly formats, allowing traders to align their positions with specific market expectations.

Unlike perpetual swaps, expiry futures do not have a funding rate. Instead, the price convergence happens naturally as the contract approaches maturity. The absence of periodic funding payments makes expiry futures more predictable for certain hedging strategies. However, traders must be aware of the settlement time, usually at 08:00 UTC, and ensure their positions are managed accordingly before that moment.

These contracts can be settled in either inverse (denominated in the base cryptocurrency) or linear (denominated in stablecoins like USDT) formats. For example, a BTC-USD quarterly futures contract settled inversely will use BTC as collateral, while a BTC-USDT contract uses USDT. This distinction affects profit and loss calculations and margin requirements.

Key Differences in Contract Structure

The most fundamental difference lies in contract duration. Perpetual swaps have no expiry, allowing indefinite holding, while expiry futures cease trading and settle on a predetermined date. This structural difference influences trading behavior and strategy design.

Another critical distinction is the pricing mechanism. Perpetual swaps rely on funding rates to track the spot price, whereas expiry futures converge naturally due to their time-bound nature. This means that in strong trending markets, perpetual swap traders may face ongoing funding costs, while expiry futures traders do not.

• Perpetual swaps use continuous funding to align with spot prices
• Expiry futures converge through time decay and settlement mechanics
• Perpetuals allow open-ended positions
• Expiry contracts require position closure or rollover at maturity

Margin and Leverage Considerations

Both contract types support cross and isolated margin modes, giving traders flexibility in risk exposure. In isolated margin, the maximum loss is limited to the allocated margin, while cross margin uses the entire wallet balance to prevent liquidation.

Despite shared margin systems, the leverage limits differ by contract and asset. For instance, BTC/USDT perpetual swaps may offer 100x leverage, whereas BTC quarterly futures might cap at 50x. These limits are enforced to manage systemic risk, especially as expiry futures approach settlement.

Traders should also note that liquidation engines operate differently. Perpetual swaps undergo constant price alignment via funding, affecting effective entry and exit costs. Expiry futures, particularly in the final hours, may experience increased volatility due to arbitrage activity between spot and futures markets.

Use Cases and Strategic Applications

Perpetual swaps are ideal for short-term speculation and trend-following strategies. Their indefinite lifespan supports holding positions through extended market movements. Traders using algorithmic bots often prefer perpetuals due to the seamless rollover and consistent contract specifications.

Expiry futures serve well in hedging and calendar spread strategies. Institutional traders use them to lock in prices for future delivery or to express views on market contango or backwardation. The predictable settlement allows for precise risk management in portfolio construction.

• Perpetual swaps suit traders avoiding rollover complexity
• Expiry futures benefit those needing defined time horizons
• Arbitrageurs use both to exploit pricing inefficiencies
• Hedgers prefer expiry contracts for matching future liabilities

Operational Workflow on OKX

To trade either instrument on OKX:

• Log in to your OKX account and navigate to the "Trade" section
• Select "Futures" and choose between "Perpetual" or "Expiry" tab
• Pick the desired cryptocurrency pair (e.g., BTC/USDT)
• Choose margin mode (isolated or cross) and set leverage using the slider
• Input contract amount and select order type (limit, market, etc.)
• Review liquidation price and funding rate (for perpetuals) before confirming

For expiry futures, verify the contract expiration date displayed prominently. For perpetuals, check the funding countdown and rate indicator. Both are visible in real time on the trading interface.

Frequently Asked Questions

Can I convert a perpetual swap position into an expiry futures contract on OKX?

No, OKX does not support direct conversion between contract types. You must manually close the perpetual swap and open a corresponding position in the expiry futures market. Ensure proper timing to minimize exposure gaps.

How is the settlement price calculated for expiry futures?

The settlement price is based on the volume-weighted average price (VWAP) of the underlying index over the final hour before expiration. OKX uses a basket of major spot exchanges to compute this index, ensuring fairness and resistance to manipulation.

What happens if I hold an expiry futures contract past its settlement time?

The contract is automatically closed and settled at the predetermined settlement price. Any profit or loss is credited or debited in the settlement asset (e.g., USDT or BTC). No action is required from the user.

Are funding rates fixed or variable in perpetual swaps?

Funding rates are variable and recalculated every eight hours based on the premium between the contract and index price. Rates can fluctuate significantly during high volatility or strong directional bias in the market.