Futures Contract (Dated)
A derivatives contract obligating two parties to buy and sell an asset at a predetermined price on a specific future expiration date, as distinct from a perpetual contract, which has no expiration.
A dated futures contract is a derivatives agreement obligating two parties to transact in an underlying asset at a predetermined price on a specific, fixed future expiration date. This distinguishes it from a perpetual swap (see Kaavon's "Perpetual Swap" glossary definition), which has no expiration date at all and instead uses a periodic funding rate (see Kaavon's "Funding Rate" glossary definition) mechanism to keep its price anchored to the underlying spot price indefinitely.
A dated futures contract's price typically converges toward the underlying spot price as its expiration date approaches, and the gap between the futures price and spot price at any given time reflects market expectations captured in concepts like contango and backwardation (see Kaavon's dedicated glossary entries). Because a dated futures contract settles and closes automatically at a known, fixed date, it doesn't carry the funding rate payments perpetual swaps require, but it also requires traders wanting to maintain ongoing exposure to actively roll their position into a new contract as expiration approaches.
Examples
- A trader using a dated futures contract rather than a perpetual swap must actively roll their position into a new contract as the current one's expiration date approaches to maintain ongoing exposure.
- A dated futures contract's price typically converges toward the underlying spot price as expiration nears, unlike a perpetual swap, whose funding rate mechanism keeps it anchored to spot indefinitely without ever expiring.