Crypto Futures vs Options Trading: What Is the Difference?

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Anatol Antonovici

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Anatol Antonovici

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Anatol is a crypto and Web3 writer at Cryptonews, where he creates educational articles, guides, and reviews about everything related to crypto.

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July 7, 2025

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Crypto futures and options are two of the most popular derivatives for gaining exposure to digital currencies without directly owning them. The main difference is that futures require you to buy or sell at expiration, while options let you choose to buy or sell until or when the contract expires.

Despite both offering unique benefits to lock in prices, futures are currently more popular. However, this doesn’t mean that one is better than the other. Each comes with its own advantages and drawbacks, making them suitable for different strategies and investor profiles.

In this guide, we discuss crypto futures vs options, explaining why many traders prefer futures and how a modified version, called perpetual contracts, is taking the crypto industry by storm.

Quick Overview: What Are Crypto Futures and Options?

Crypto futures and options are part of a broader group of financial instruments known as crypto derivatives. They track the price of an underlying crypto asset, fund, or index, offering traders a way to speculate on price changes without directly buying the cryptocurrency.

The concept of crypto futures and options is borrowed from traditional finance. These instruments allow traders to gain exposure to commodities, stocks, real estate, indexes, and other assets. Derivatives trading volumes are currently much higher than spot trading, where investors buy and sell actual cryptocurrencies.

Crypto futures trading is more popular than options trading, accounting for the largest share of crypto activity these days. However, options have been gaining traction as well, with open interest figures reaching record levels at the end of 2024.

As of July 2025, perpetual and futures volumes across all crypto coins account for nearly 80% of the entire trading volume, as per CryptoRank.

Derivatives trading volumes tend to increase during crypto market rallies, when the appetite for speculation increases. For example, this chart from Coinglass shows that Bitcoin perpetual futures volume exceeded spot volume by only 1.3 times in late 2022, when the market entered the “crypto winter” phase following several major collapses, including the infamous FTX. This ratio is currently at 8.9.

Crypto Futures

Crypto futures are contracts where a buyer and seller agree to trade an underlying cryptocurrency for a predetermined price at a future date. The contract has an expiration date when the buyer has the obligation to buy the crypto asset at the agreed price.

On the other hand, the seller has the obligation to sell it at the predetermined price regardless of how much the cryptocurrency moved by that time.

In other words, futures contracts provide a way to lock in prices to mitigate the effect of potential extreme volatility, such as the one experienced by SOL in 2022/23, when a futures position could yield an income despite the drop in price.

These contracts were first implemented for commodities, especially agricultural and energy products. For example, futures would help a farmer secure a certain price for seasonal products, whose supply and prices are difficult to predict.

Given the high volatility of crypto assets, futures provide a convenient way to protect against wild price fluctuations.

A futures contract allows you to pay for a crypto coin at current prices and get the product or cash equivalent at the expiration time. If the price drops in the meantime, you have to buy at the agreed price and end up losing the difference. However, if the crypto price increases, you end up with a profit.

Today, many crypto exchange platforms and specialized futures exchanges offer Bitcoin and altcoin futures.

Margin Trading

Many crypto traders prefer futures as they offer leverage, helping them to open larger positions with borrowed funds, thus committing only a portion of the total value as margin.

For instance, 10:1 leverage requires a 10% margin. Here, a 10% increase in the futures trading position would result in a 100% return. However, losses are amplified in the same way, increasing the risk of liquidations.

Here are the margin requirements and potential returns for different leverage scenarios:

Perpetual Futures

The defining aspect of a futures contract is its expiration date, but there is a modified version of this instrument that eliminates it entirely. Known as perpetual futures, these derivatives closely follow the prices of underlying crypto assets and allow traders to hold positions indefinitely.

Crypto perpetuals are becoming more popular than traditional crypto futures, especially in decentralized finance (DeFi), where monthly volumes continue to expand to new record levels.

The trading experience with perpetuals is quite similar to that of contracts for difference (CFDs), another popular derivative that helps traders speculate on price changes.

Crypto Options

Unlike futures, crypto options give traders the right, but not the obligation, to buy or sell the underlying crypto asset at a predetermined price before or on a specific expiration date.

As with other derivatives, option holders don’t own the cryptocurrency unless they use the option to buy it at the expiry time.

There are two types of options reflecting the two possibilities of price moves:

• Call options give the right to buy the cryptocurrency at the strike price (initial option price) before or at the expiry time.
• Put options give the right to sell the crypto asset at the strike price before or at the expiry time.

With these two option types, traders have the flexibility to let the contract expire if the price moves against their expectations, limiting potential losses.

But what’s the catch? Can you just use Calls to buy crypto for discount prices when the price surges higher? Traders can definitely do this, but options come with a premium cost paid upfront.

For example, a trader can buy a Bitcoin Call option as he anticipates Bitcoin’s price to increase. If the price does indeed go up beyond the strike price plus the premium paid, the trader can exercise the option and secure a profit. Otherwise, if the price remains below the strike, the trader loses only the premium.

This model makes options suitable for hedging or speculative trading, especially in highly volatile markets like crypto.

Some of the largest crypto options trading platforms are offered by Binance, OKX, Deribit, and Bybit. The open interest in Bitcoin options across these platforms continues to expand in 2025.

Differences Between Crypto Futures vs. Crypto Options

Crypto futures and options are derivatives that enable traders to gain exposure to crypto assets without holding crypto directly. However, the two work differently.

Here is a brief overview of the main differences between futures and options:

Let’s dive deeper with some of these key aspects:

Ownership

Neither crypto futures nor options offer direct ownership.

Futures technically compel both buyers and sellers to trade the underlying crypto at the specified date. Most crypto futures offered by traditional platforms settle in USD, while those provided by crypto exchanges and DeFi protocols settle in stablecoins.

Elsewhere, options don’t require traders to buy or sell the related crypto asset. While they can technically lead to ownership at the expiration time, most traders never take ownership in the asset. On top of that, most options today also settle in USD equivalents too.

Leverage

Traders prefer crypto futures for their high leverage potential, with some platforms offering up to 125x leverage. This means that with $10 in your account, you can open a $1,250 position to maximize gains.

However, margin trading amplifies both profits and losses. High leverage leads to liquidations much quicker if the price moves in the undesired direction.

On the other hand, options usually don’t involve leverage for buyers, with the full premium being paid upfront.

Settlement

As mentioned, futures can be settled in cash and rarely in physical delivery at expiration. Traders can close positions before expiry or expect automatic settlement.

Options may be either exercised or left to expire worthless, with traders losing the premium paid upfront. Most crypto options are also settled in cash, at current market prices, and many expire without being exercised, e.g., those out-of-the-money.

Costs

Futures involve several costs, including platform fees and funding rates, in the case of perpetuals. A hidden cost is the spread, which represents the difference between the price traders are willing to pay (bid) and the price asked by sellers (ask). However, the spread is very tight with most futures.

Elsewhere, options buyers must pay a premium upfront, representing the cost of the position. Institutions or professional traders can become option sellers, facing margin requirements and collateral costs. Also, options usually have wider spreads.

Liquidity

As mentioned, futures are way more popular, and they benefit from deep liquidity. Perpetual contracts on major exchanges are even more liquid. With high trading volumes, the spreads are tighter and the slippage is very low.

Options are less liquid, resulting in higher slippage. BTC and ETH options have deeper liquidity than other supported coins, such as XRP options, for example.

To recap, futures are best for riding trends and protecting against price swings, while options are preferred in volatility trading and hedging. The latter ones are more complex, making them unsuitable for beginners.

Both derivatives are useful, but they suit different trading strategies and styles.

Crypto Futures vs. Options Use Cases: Which Is Better?

There is no objectively better instrument between the two, as they both have strengths and limitations, serving different purposes. The choice depends on your experience, strategy, and risk profile.

Let’s quickly explore a few scenarios where one might be preferable.

Day Traders & Scalpers: Futures

Day traders and scalpers open and close positions during the same day, sometimes holding them for only a few seconds. They need deep liquidity, low fees, and the possibility to quickly open and close leveraged positions. Therefore, futures are the right instrument for them.

Futures contracts track the underlying asset very closely, enabling traders to find the right entry and exit points without dealing with complex pricing models.
Perpetual futures work even better with day trading as they have no expiry time.

Volatility Traders or Hedgers: Options

Volatility traders and hedgers would prefer options. Why? They offer more flexibility in trade execution, being used to bet on significant price swings or protect existing position from unfavorable price moves through hedging.

For example, you can buy a put option to hedge against a potential bearish move without having to sell your crypto holdings. If the market doesn’t drop, you only lose the premium, which is essentially your cost of insurance to maintain the position.

In highly volatile markets, traders anticipating wild fluctuations in either direction can buy both a call and a put to benefit from volatility itself, regardless of price direction. However, this requires experience and involves certain risks, especially if mistiming exits.

Beginners: Low-Risk Perpetuals or Simulated Options

Beginners can start with futures contracts since they are simpler and follow the underlying price more closely. Perpetuals offer the same experience as trading actual crypto, especially when leverage is not used or minimal.

If they want to gain experience with options, they can start with simulated ones or with small, limited-risk positions involving a single call or put.

Some platforms allow copy trading, where beginners may implement the strategies of successful traders. This can help novices understand how the markets work and build confidence.

Why Some Traders Prefer Options Over Futures

While futures are way more popular and widely used compared to options, some traders still prefer the latter for a number of reasons.

Strategic complexity

With options, professional traders can develop multi-leg strategies like straddles and strangles, allowing them to have more control over market conditions. This kind of customization of strategies isn’t possible by simply going long or short with futures.

Defined risk and potential for asymmetric returns

Options offer defined risk and higher return potential than maximum losses. When purchasing options, all you can lose is the premium paid. With futures, leverage can amplify losses to the point that they may go beyond the initial deposit. While knowing the risk precisely, options offer significant upside potential.

Better suited for uncertain or sideways markets

If the crypto market is showing high volatility but moving within a horizontal channel, you can’t get the most out of futures. Instead, options can be structured to profit even when the market moves sideways.

There are certain strategies involving multiple call and put options that can generate returns during uncertain markets.

What Is Safer: Futures or Options?

In finance, there is no profit without some risk involved, as markets can defy expectations at any time.Therefore, both instruments carry risk, although their exposure to risk differs.

But futures contracts are riskier despite their simplicity. This is because leverage, although attractive, involves liquidation risk. An unexpected market move, which happens so often in crypto, can wipe out a position entirely and trigger a margin call.

In fact, with futures, losses can exceed the initial deposit, which is not the case with options. With them, you can lose the premium only, regardless of how far the price moves against your bet. This defined risk is what makes options the safer choice, at least on paper.

No matter what you choose, risk management is imperative. By implementing basic risk management techniques, such as using stop-loss orders, hedging strategies, and position sizing, you can greatly reduce the risk exposure.

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