Why are most crypto exchanges not having future market?

[Oshosondy]

I am not referring to perpetual future. I am referring to future market that have closing date, but which you can also decide to close your position at any time that you want.

Bybit has been the best, followed by Binance and OKX.

During bear market time when the market is promising again, some traders may be position holders and be patient till expiration data to open another position.

I have noticed that margin holding is very better than perpetual future position holding for long term traders if there is no future market on thr exchange, but the exchanges are making money from the margin holding.

[Dr.Bitcoin_Strange]

I am referring to future market that have closing date, but which you can also decide to close your position at any time that you want.

Well, I think it's  because perpetual futures is more popular and used by a lot of traders compare to dated futures.
Liquidity coupled with low volume could also be another problem, for an exchange to have such futures option, they must be sure to have  enough buyers and sellers to avoid spreads becoming too large. I can say that perpetual features usually have the most liquidity and volume, that's why some exchange likely have the perpetual option.

 The first time I hear about this dated futures or expiration of futures contract was last week when I came across a video on TikTok trying to explain how it works and how price can sometimes experience sharp validity when the contract expires. If this was really that popular, I might have known about it years back when I started trading but I guess there are also a lot of traders like me who didn't know too but only knows about perpetual futures.

[BitMaxz]

You mean most of the exchange or well-known exchange doesn't have many dated offers? I mean, non-perp offers?
On OKX I saw a few of them, mostly in USD-margined and crypto-margined, but none in USDT. It seems this non-perp offers are for investors who prefer date ranges. Usually most of what I hear from those who trade from non-perp are the derivative range traders; like I said, they prefer a fixed duration and the good advantage is that it no funding fees.

I never tried those offers with expiry; usually I use perpetual ones when trading since the only thing I could see an advantage from dated is the funding fees and nothing else.

[sergiorus]

Expiring futures' prices, unlike perpetual futures' prices, aren't based on the current spot prices.

They are traded at either premium or discount, depending on the market's expectations. Basically they are an independent market hence they need a lot of liquidity and volumes for smooth price action. Not many exchanges have that, and even if they do, such markets oftentimes stay illiquid and unpopular.

[ryzaadit]

In my local exchange, there has some few reasons why right now our local exchange doesn't have or provide a future market for us. Even though there are some platforms are currently in our local exchange/service who provide a market having future market. But majority of our famous local, don't provide future market.

The reasons are our responsibility to protec customer & law regulations:

• We focused on spots because the customer has a clear situation for the ownership of the asset they're buying.
• The risks are too high, in crypto the risk is self-evident even if you trade in spots already very high.

Another good reason why in our country still doesn't want to introduce a futures market. Right now, we are on the transition to adopt crypto, and we want to give some a goods view for cryptocurrency. It's quite important to give the impression that cryptocurrencies are a safe investment opportunity.

[shinratensei_]

Low demand and it brings less money to the exchange, perpetual market have significantly higher volume than its dated future market counterpart maybe even 10x of dated futures volume which means more money and people who trade perpetual market trade more than those who buy dated futures. There is also HFT, short term frequent traders, and so on that consistently pay more transaction fee than a trader who only buy dated future contract and wait it until it expires.

Lesser tier exchange certainly don't want dated future because they are operating on low operating cost and prefer something that brings them more money even though us as a trader might find dated future more profitable but that's the truth.

Also, for a smaller scale exchange creating perpetual market is easier, you don't need real asset backing it, you just open a market and let the market trade on the oracle price and adjust the funding rate. As simple as that, unlike dated future where the exchange need to do contract settlement and do the complex contract calculation.

[Charles-Tim]

Well, I think it's  because perpetual futures is more popular and used by a lot of traders compare to dated futures.
Liquidity

You are right that perpetual future is most common and have highest trading volume, but why are exchanges like Bitget, Gate and many among them are not offering it? They have the requirements and required people just like exchanges like OKX but they decide not to offer it. I think there is a reason best known to them that make them not offering it. If they can not have it for altcoins, they can have it for just bitcoin.

[joniboini]

The reasons are our responsibility to protec customer & law regulations:

Is this reason their response to your question? I find it hard to believe these exchanges really wanted to protect customer judging from how they conduct their business. For example, introducing meme tokens that dies quickly, flag some accounts with little to no details, and so on. As for law, I can see that. Especially with how slow governments update the framework (sometimes the people on the top are out of touch with the market too).

Even if they offer future market though, I probably won't touch them. It gets harder to use them and it's in my best interest to avoid interacting with CEX as much as possible.

[crwth]

I do see those trading pairs with expiration dates. I remember BitMEX having it, and I still don't understand the trading back then. I wasn't able to really utilize it, but i think it's not that common anymore.

The current trend that i think is happening now is with the prediction markets, and i think those are the ones that have deadlines for the positions.

[nelson4lov]

Crypto exchanges do have dated futures but they're not popular like perpetual futures. I've not traded US futures market before so I don't know how the experience is compared to perp futures in crypto. I've never found myself buying or selling any dated futures because perpetuals just allow me to get into the market ASAP and you don't have any dates in futures where you must switch contracts.

[Alphakilo]

You mean most of the exchange or well-known exchange doesn't have many dated offers? I mean, non-perp offers?
On OKX I saw a few of them, mostly in USD-margined and crypto-margined, but none in USDT. It seems this non-perp offers are for investors who prefer date ranges. Usually most of what I hear from those who trade from non-perp are the derivative range traders; like I said, they prefer a fixed duration and the good advantage is that it no funding fees.

I never tried those offers with expiry; usually I use perpetual ones when trading since the only thing I could see an advantage from dated is the funding fees and nothing else.

I simply see perps as the outright replacement for dated futures and yes, the funding fees are better and remain pegged to the spot price.
Also, it's easier to see an organized list of buyers and sellers liquidity in concentration, maybe that's why some exchanges and some traders prefer perps to dated futures.


 

[BitMaxz]

I simply see perps as the outright replacement for dated futures and yes, the funding fees are better and remain pegged to the spot price.
Also, it's easier to see an organized list of buyers and sellers liquidity in concentration, maybe that's why some exchanges and some traders prefer perps to dated futures.
 

Well, the old-school future contract with expiry is not my forte; I don't see any advantage of these it gives a different price compared to prep. That is why I stick to perps is that they don't have an expiry, and like you said, it remain pegged to the spot price, and most of the traders are using perps.

Like I said, the only advantage of a contract with an expiry is no funding fees, nothing else, and I only see very tiny volume compared to prep.
And I already had many perps' orders in my history; I don't want to switch to a contract with an expiry unless I'm planning to hold a position for too long and if I know the price is not against my analysis.

[JeffBrad12]

Because some exchanges are B-BOOK and they act as a counterparty, serving like the house, and if they offered futures with expiry they will need to do external hedging and if the internal matching engine lacks the liqudiity, they need to compensate for the offset straight out of the company treasury and they don't want that.