Binance futures are actually CFDs…

First, let’s talk terminologies here.

Futures refer to contracts whereby a buyer agrees to buy an asset at a set price at some future date.

Quarterly futures will expire, and the seller will be obligated to sell the asset, while the buyer is obligated to buy it on expiry.

Perpetual futures are ones in which you don’t have any preset expiry, and the buyer can choose to execute their option whenever they please, and the seller has to oblige.

CFDs, ie: contracts for difference are contracts derivative of the assets (meaning they extrapolate their price from them) and whereby a buyer and a seller agree to pay only difference in price, depending on which way the price goes, without ever owning or even remotely involving the asset.

If a buyer goes long, and the price rises, the seller has to pay the difference.

If the price falls, the buyer pays the seller the difference.

But no asset exchange takes place.

I noticed that when Binance futures expire, no asset is ever transferred.

Furthermore, a seller that opens a short position has no obligation to buy the asset and provide it to the buyer.

The only thing that happens is the price difference gets paid in the denominating currency of the transaction…

Therefore, can we all agree that Binance Futures should be renamed Binance CFDs?!