Spot, perpetual and dated futures: basis, contango and backwardation
One coin trades on three markets at once: spot, the perpetual future and a dated future with an expiry date. The difference between their prices — the basis — is the source of every spread in this course. Using real Binance prices, we look at why the BTC quarterly future costs more than spot and how much that is per year.
This course is about price spreads: when the same coin costs different amounts on two markets, and that difference can be captured by holding opposite positions. To understand where spreads come from and why some converge while others do not, we start with the three markets every large coin trades on.
Spot
On spot you buy the coin itself and own it: you can withdraw it from the exchange, transfer it and hold it as long as you like. Spot has no funding, no expiry and no liquidation unless you trade on margin. Spot prices from several major exchanges form the index price that futures are tied to.
The perpetual future (perp)
A contract on a coin’s price with no expiry date, with leverage and the ability to short. To keep its price close to spot, every few hours the exchange charges one side of the market and pays the other a funding rate. The mechanics are covered in detail in the funding rate arbitrage course.
The dated future
A contract with an expiry date. It has no funding; instead, on expiry all open positions are settled at a settlement price tied to the index. That is why by expiry the dated future’s price must converge with spot. Binance currently lists quarterly USDT contracts: BTCUSDT_261225 expiring on December 25, 2026 at 08:00 UTC and BTCUSDT_270326 on March 26, 2027 at 08:00 UTC. The number in the name is the expiry date.
Index price and mark price
The index price is a weighted average spot price across several exchanges; Binance’s index includes about 15 venues, and a source that deviates from the median by more than 3% is capped. The mark price is built from the index and used to calculate unrealized profit and liquidations — so one anomalous trade does not liquidate positions.
Basis, contango and backwardation
- Basis = futures price − spot price. As a percentage — the basis divided by the spot price.
- Contango — the future trades above spot, the basis is positive. In crypto this is the usual state: more people want to buy with leverage, and money costs money.
- Backwardation — the future trades below spot. It happens in panics and when demand for shorts is strong.
- Annualized basis = basis in % × 365 ÷ days to expiry. It lets you compare contracts with different maturities.
| Coin | Market | Price | Vs spot | Annualized |
|---|---|---|---|---|
| BTC | Spot | 77,302.50 | — | — |
| BTC | Perpetual | 77,266.7 | −0.046% | — |
| BTC | BTCUSDT_261225 | 77,910.3 | +0.79% | +5.21% |
| BTC | BTCUSDT_270326 | 78,961.8 | +2.15% | +5.36% |
| ETH | Spot | 2,243.45 | — | — |
| ETH | Perpetual | 2,241.97 | −0.066% | — |
| ETH | ETHUSDT_261225 | 2,255.80 | +0.55% | +3.65% |
| ETH | ETHUSDT_270326 | 2,278.88 | +1.58% | +3.95% |
The further the expiry, the larger the basis in dollars: the March contract costs more than the December one. But annualized they are close — the market pays for time at about the same rate. The perp, meanwhile, trades almost at spot: the difference is hundredths of a percent, because funding pulls it to the index every 8 hours.
Annualized basis of the front quarterly future on Binance, October 2026
Chart data
| BTCUSDT | ETHUSDT | |
|---|---|---|
| 01.10 | 5.09 % | 3.89 % |
| 02.10 | 4.8 % | 3.81 % |
| 03.10 | 5.34 % | 4.16 % |
| 04.10 | 4.74 % | 3.77 % |
| 05.10 | 4.67 % | 3.46 % |
| 06.10 | 5.13 % | 4.04 % |
| 07.10 | 4.92 % | 3.91 % |
| 08.10 | 5.17 % | 3.91 % |
| 09.10 | 5.29 % | 4.25 % |
| 10.10 | 5.07 % | 4.21 % |
| 11.10 | 4.99 % | 3.88 % |
| 12.10 | 5.11 % | 3.93 % |
| 13.10 | 5.13 % | 4.18 % |
| 14.10 | 5.2 % | 4.14 % |
| 15.10 | 5.48 % | 4.76 % |
| 16.10 | 5.45 % | 4 % |
| 17.10 | 5.53 % | 4.53 % |
| 18.10 | 5.18 % | 4.38 % |
| 19.10 | 5.42 % | 4.55 % |
| 20.10 | 5.94 % | 4.79 % |
| 21.10 | 5.03 % | 4.08 % |
| 22.10 | 5.56 % | 4.48 % |
| 23.10 | 5.36 % | 4.32 % |
| 24.10 | 5.27 % | 4.1 % |
| 25.10 | 5.53 % | 4.23 % |
| 26.10 | 5.44 % | 4.17 % |
| 27.10 | 5.66 % | 4.55 % |
| 28.10 | 5.32 % | 4.07 % |
| 29.10 | 5.67 % | 4.33 % |
| 30.10 | 5.25 % | 3.95 % |
Three kinds of spreads in this course
Frequently asked questions
How is a dated future different from a perpetual?
A dated future has an expiry date: positions are settled at a price tied to the index, so its price must converge with spot. A perpetual has no expiry and is tied to spot by funding.
What is basis?
The difference between the futures price and the spot price. A positive basis (the future is pricier) is contango, a negative one is backwardation.
How do I calculate annualized basis?
Multiply the basis in percent by 365 and divide by the number of days to expiry. For example, 0.79% over 55 days is about 5.2% a year.
Why does the perp trade almost at spot while the quarterly future is pricier?
The perp is pulled to the index by funding every few hours. The quarterly future has no funding, and its price includes payment for the time until expiry — the basis.
What is the index price?
A weighted average spot price across several exchanges. The perp’s funding, the mark price and the dated future’s settlement at expiry are all tied to it.
Sources
- 1.USDⓈ-Margined Delivery FuturesBinance1/30/2026official
- 2.Delivery and Settlement of Quarterly FuturesBinance1/2/2026
- 3.
- 4.What Are Mark Price and Price Index in USDⓈ-Margined Futures?Binance9/25/2026
- 5.Revisiting the Bitcoin basis: how momentum and sentiment impact the tradeCF Benchmarks10/16/2025
- 6.P2P.Army: futures screener — spot and futuresP2P.Army10/31/2026
About the author
Crypto expert, arbitrage trader and investor
Crypto expert and hands-on crypto arbitrage trader, investor and software developer with over 20 years of experience. On the P2P.Army blog he covers exchange news, P2P and cross-exchange arbitrage.
- Crypto arbitrage
- P2P arbitrage
- Cross-exchange arbitrage
- Crypto exchanges
- Investing
- Software development
