Cryptocurrency futures trading has become a cornerstone of digital asset investment, offering traders the ability to profit from both rising and falling markets. Among the various types of crypto derivatives, Bitcoin delivery contracts and perpetual contracts are two of the most widely used. A common question among new traders is: Can you close a contract position at any time? The answer largely depends on the type of contract and the exchange's rules. Let’s dive into the mechanics, key regulations, and best practices for Bitcoin futures trading.
Understanding Crypto Futures: Delivery vs. Perpetual Contracts
Futures contracts in the crypto space allow traders to speculate on the future price of an asset like Bitcoin. There are two primary types:
- Delivery (or Expiry) Contracts: These have a fixed expiration date. On that date, all open positions are automatically settled based on the final settlement price.
- Perpetual Contracts: These do not expire, allowing traders to hold positions indefinitely.
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Can You Close a Position Before Expiry?
Yes — you can close a futures position at any time before the contract expires, whether it's a delivery or perpetual contract. This is known as "closing the position" or "liquidating." You’re not required to hold until settlement.
For delivery contracts, however, there’s a critical window: during the final 10 minutes before settlement, you can only close existing positions — no new ones can be opened. This rule helps stabilize the market during settlement.
Key Rules for Bitcoin Delivery Contracts
When trading Bitcoin delivery contracts, several important rules apply:
1. Settlement Time and Trading Interruption
Bitcoin delivery contracts typically settle every week (weekly contracts), bi-weekly, or quarterly. During the settlement process (usually at 16:00 UTC+8 on Fridays), trading is temporarily paused. It resumes shortly after settlement completes.
2. Mark Price Protection
Exchanges like Binance use a mark price — derived from global spot prices — to calculate unrealized profits and trigger liquidations. This prevents malicious price manipulation from causing unfair liquidations.
3. Position Management
Each contract type (e.g., weekly, quarterly) supports both long and short positions. In most systems, you can hold up to six positions simultaneously:
- Long and short for weekly
- Long and short for next-week
- Long and short for quarterly
Positions of the same type and direction are automatically merged.
4. Leverage and Margin Requirements
Higher leverage increases potential returns — but also risk. As your total exposure grows:
- Required margin increases
- Maximum allowable leverage decreases
This dynamic adjustment protects both users and the platform from systemic risk.
How to Close a Position: Market vs. Limit Orders
Traders can exit positions using different order types:
Market Close (Market Order)
- Executes immediately at the best available price.
- Fastest method, but may suffer from slippage in volatile markets.
Limit Close
- Set your desired exit price.
- Offers price control, though execution isn’t guaranteed if the market doesn’t reach your level.
👉 Learn how smart order execution improves your trading results
Stop-Loss and Take-Profit Orders
Advanced traders use conditional orders:
- Take-Profit: Automatically closes when a target profit is reached.
- Stop-Loss: Limits losses by closing if price moves against you.
These tools are essential for risk management.
Can You Withdraw Profits After Closing?
Yes. Once you close a position and realize profit, those funds are credited to your futures wallet. You can:
- Reinvest in new trades
- Transfer to your spot account
- Withdraw to an external wallet
There’s no lock-in period — profits are immediately accessible.
Common Questions About Contract Trading
Q: What happens if I don’t close my delivery contract before expiry?
A: The exchange will automatically settle your position at the final mark price. Any profit or loss is realized instantly.
Q: Can I close part of my position?
A: Yes. Most platforms allow partial closures, giving you fine control over risk exposure.
Q: Is there a fee for closing a contract early?
A: Closing early incurs standard trading fees, same as opening. No additional penalties apply.
Q: Do perpetual contracts have any hidden costs?
A: Yes — funding fees. These periodic payments (every 8 hours) ensure the contract price stays close to spot. Longs pay shorts (or vice versa) depending on market conditions.
Q: What is auto-deleveraging?
A: In extreme cases, heavily leveraged losing positions may be force-closed and offset by profitable counterparties. This rare mechanism protects the insurance fund.
Q: Can I trade 24/7?
A: Yes — crypto futures markets operate 24/7, except during brief settlement interruptions for delivery contracts.
Why Trade Perpetual Contracts?
Perpetual futures offer distinct advantages:
- No expiry date — ideal for long-term strategies
- Up to 100x leverage (varies by platform)
- Low capital requirement: e.g., trade $10,000 worth of BTC with just $100
- Funding rate mechanism keeps price aligned with spot
They’re especially popular among active traders seeking maximum flexibility.
Best Practices for Contract Traders
- Use Stop-Losses Religiously – Leverage magnifies both gains and losses.
- Monitor Funding Rates – Avoid holding positions during high funding cost periods.
- Start Small – Practice with low leverage before scaling up.
- Understand Liquidation Price – Know your risk threshold.
- Keep API Keys Secure – Never share them; enable two-factor authentication.
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Final Thoughts
Crypto futures trading offers powerful tools for speculation and hedging. Whether you're trading Bitcoin delivery contracts or perpetuals, you can close your position anytime before expiry — giving you full control over your trades. Understanding settlement rules, leverage dynamics, and order types is crucial for success.
By mastering these concepts and using disciplined risk management, traders can navigate volatile markets with confidence and precision.
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