A futures contract is an agreement to buy or sell an asset at a predetermined price on an agreed date in the future. This agreed date is also called the contract expiration date, which is the date when the contract is settled and the asset is delivered.
Binance Futures are cash settled. What does this mean? Cash settlement means that the underlying asset will be delivered in the form of money. In the case of Binance Futures, that asset is BTC.
Binance Futures expire on the last Friday of each quarter. For example, the BTCUSD 0925 contract will expire on the last Friday of the third quarter of 2020, which is September 25, 2020. This can also be called the delivery date because this is when the underlying asset (BTC) is delivered.
In traditional financial markets, such as the stock market, derivatives attract much higher volumes than the spot market. We see this in the cryptocurrency market as well. Futures markets have higher volumes and more liquidity than spot markets. Therefore, if a trader believes that a particular asset will perform well, trading futures can be a good way to predict future price movements.
