Crypto futures explained
Futures let traders bet on a price without owning the coin, usually with borrowed money. That's why they move fast and can wipe accounts out.
A crypto futures contract is an agreement to buy or sell a cryptocurrency's value at a set price on a future date. Traders put down only a fraction of the contract's value as margin, so gains and losses are magnified, and positions can be closed out automatically when losses eat the margin. In the US, regulated bitcoin futures trade on exchanges like CME; offshore exchanges also offer "perpetual" futures with no expiry date.
How a futures contract works
Two sides agree on a price for a later date. If the price rises, the buyer ("long") gains and the seller ("short") loses, and the reverse if it falls. Most crypto futures are cash-settled: no coins change hands; the difference is paid in dollars. Gains and losses are settled every day, so your account balance moves with the price.
Main types
| Contract | Size | Where |
|---|---|---|
| CME Bitcoin futures (BTC) | 5 bitcoin | CME, through futures brokers |
| CME Micro Bitcoin futures (MBT) | 0.1 bitcoin | CME |
| Coinbase "Nano" Bitcoin futures | 0.01 bitcoin | Coinbase Derivatives, through retail brokers |
| Ether and other coin futures | Varies by exchange | CME, Coinbase Derivatives and others |
| Perpetual futures ("perps") | Varies | Mostly offshore exchanges; no expiry date |
CME's monthly bitcoin futures expire on the last Friday of the contract month and settle to the CME CF Bitcoin Reference Rate.
Margin, leverage and liquidation
You don't pay the full value of a contract. You post margin, often a fraction of it, which is leverage. With 10x leverage, a 10% move against you wipes out your margin. If your balance falls below the required level, your broker or exchange demands more money (a margin call) or closes your position automatically (liquidation). In fast crypto moves, liquidations can cascade and push prices further.
How much money do you need to trade futures? Enough to cover the margin the broker requires for that contract, which changes with volatility, plus a cushion for losses. Brokers set their own minimums. Smaller contracts like micro and nano futures need less, but the risk per dollar is the same.
Perpetual futures and funding rates
Perpetuals never expire. Instead, every few hours one side pays the other a funding rate that keeps the contract's price near the spot price: when most traders are long, longs pay shorts. Funding adds up over time. Perpetuals are where most crypto leverage lives, and many of the platforms offering them aren't allowed to serve US customers.
Expiration, rollover and month codes
A futures contract stops trading at expiry. Traders who want to stay in a position "roll" it: close the expiring contract and open the next one. If later contracts cost more (contango), rolling repeatedly is a cost; this is one reason futures-based ETFs can lag the coin itself. Contracts are named with a letter for the month and digits for the year, so MBTZ6 would be the December 2026 micro bitcoin contract.
| Month | Code | Month | Code | Month | Code |
|---|---|---|---|---|---|
| January | F | May | K | September | U |
| February | G | June | M | October | V |
| March | H | July | N | November | X |
| April | J | August | Q | December | Z |
Before you trade futures
- You can lose more than you expected, and with some products more than you deposited.
- Use only regulated brokers available where you live. In the US, check them with the NFA's BASIC search.
- Be wary of "signal" groups and copy-trading offers promising futures profits; they're a common route into fake trading platforms.
Frequently asked questions
What are bitcoin futures?
Contracts that track bitcoin's price for a future date, usually settled in cash. They let traders bet on rises or falls with leverage, without holding bitcoin.
What is the difference between futures and perpetual futures?
Regular futures expire on a set date. Perpetuals never expire and use periodic funding payments to stay close to the spot price.
What is the futures month code for December?
Z. The full list: F (Jan), G (Feb), H (Mar), J (Apr), K (May), M (Jun), N (Jul), Q (Aug), U (Sep), V (Oct), X (Nov), Z (Dec).
Where to next
Sources
- Micro Bitcoin futures product overview (CME Group)
- Coinbase to offer nano bitcoin futures (Blockworks)
- BASIC: background affiliation status information center (NFA)
Written for beginners and checked against the sources listed. Last reviewed October 26, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.