No end date doesn’t mean no cost of time
A standard futures contract has an expiration date. If you need to hold a position longer, you have to roll the contract forward. TradFi Perp eliminates this calendar operation because there is no fixed end date.
Sounds simpler. But time doesn’t become free.
In TradFi Perps, funding is calculated every eight hours. While the position is open, payments can accumulate. At the same time, Binance may change margin requirements, the available leverage, and other contract specifications depending on market risk.
So the lack of expiration solves only one problem: you don’t need to regularly roll the contract. It does not remove:
• funding;
• liquidation risk;
• changes to contract parameters;
• price gaps when opening the underlying market.
Before a long hold, I wouldn’t count “how many days are left until expiration,” but rather “how many funding calculations will pass through the position and how much margin buffer will survive that time.”
#TradFi
A standard futures contract has an expiration date. If you need to hold a position longer, you have to roll the contract forward. TradFi Perp eliminates this calendar operation because there is no fixed end date.
Sounds simpler. But time doesn’t become free.
In TradFi Perps, funding is calculated every eight hours. While the position is open, payments can accumulate. At the same time, Binance may change margin requirements, the available leverage, and other contract specifications depending on market risk.
So the lack of expiration solves only one problem: you don’t need to regularly roll the contract. It does not remove:
• funding;
• liquidation risk;
• changes to contract parameters;
• price gaps when opening the underlying market.
Before a long hold, I wouldn’t count “how many days are left until expiration,” but rather “how many funding calculations will pass through the position and how much margin buffer will survive that time.”
#TradFi