Products with and without expiry
Perpetual futures, the most traded crypto derivatives, have no expiry, as the name says; they stay near the spot price through funding payments. Dated futures and options, by contrast, end on a set day, and profit or loss is fixed at that day's settlement price. Dated futures usually list several expiries at once, such as monthly and quarterly contracts, and many exchanges run options expiring daily, weekly, monthly and quarterly. When you see an unexplained spike on a chart, simply asking whether that time lined up with a large expiry can narrow down the cause. This guide explains how expiry works; it does not deal with claims that prices rise or fall on expiry days.
How expiry settlement works
Many exchanges do not set the settlement price from a single trade. They often average an index built from several spot exchanges over a window just before expiry, which makes it hard to move the settlement price by pushing one exchange for a moment. Most crypto futures and options settle the difference in cash rather than delivering coins. The settlement time, averaging window, reference index and expiry cycle differ by exchange and product, and they can change, so always confirm the details in the exchange's official contract specifications.
- Expiry date and time, and which time zone it uses
- The reference index and the exchanges in it
- The averaging window
- Cash settlement or physical delivery
How the basis narrows
The difference between a dated future's price and the spot price is called the basis. With plenty of time left, the future can trade above or below spot, but on expiry both settle to the same reference, so the gap shrinks as expiry approaches. That is why the basis, annualized over the time remaining, is sometimes used as a gauge of market mood: a large positive figure is read as many traders willing to pay up for futures. Before expiry, traders also roll positions into the next contract, so open interest in the expiring contract falls while the next one rises. Reading that shift as leverage unwinding or building up would be a mistake.
Options expiry and open interest by strike
Options trade separately at each strike, so screens showing where open interest is concentrated are common. Two stories come up often. One says the price gets pulled toward strikes with large open interest near expiry; the other says it settles at the price where option buyers as a whole lose the most, the so-called max pain price. Both come from assuming that option sellers hedge by trading spot or futures. Public data does not show who bought, who sold or how they hedged, though, so changing the assumption flips the reading. It also helps to remember that the cases where these stories worked are the ones people tend to recall.
What to check on the chart around expiry
Near the expiry time, trades that close positions or adjust hedges for the settlement window can bunch up and lift volume above normal, and once expiry passes, those trades disappear and the size of moves may change. This does not happen in the same direction every time, and many expiries pass without incident. If you see a spike, working through the steps below can narrow down the cause.
- Does the candle's time match a large expiry's settlement time?
- Was it a day when several products expired together, such as a quarterly expiry?
- Was there another scheduled event at the same time, such as an economic release?
- Do volume and open interest return to normal the next day?
Weekend blanks: gaps in regulated exchange futures
Bitcoin futures on the US Chicago Mercantile Exchange (CME), unlike crypto exchanges, stop trading over the weekend. Their chart therefore shows a blank, a gap, between Friday's last price and the first price of the new week. The idea that these gaps always get filled is widespread, but unless you set a time limit, almost any gap gets filled eventually, so it is hard to call it a tested rule. Gaps that stay open for a long time rarely get talked about, which adds to the illusion. It is more accurate to see a gap as a record that the price moved on crypto exchanges over the weekend.
Checking it with this site's live tools
The Long/Short Ratio & Open Interest tool plots Binance futures open interest on the same time axis as price, so you can see directly whether open contracts fell or rose around a large expiry or settlement time. The Funding Rate Dashboard shows positioning on the perpetual side, which has no expiry; thinking about it alongside the basis of dated products helps you understand the mood of the derivatives market as a whole. The Volume Spike Scanner compares 5-minute, 15-minute and 1-hour volume with the average of the previous 20 candles, so you can check on the day whether trading bunched up around a settlement time.
Summary and caution
Dated products settle at a set time against an index average, the basis narrows as expiry nears, and changes in open interest around expiry include rolls into the next contract. Knowing the expiry calendar helps you explain spikes, but expiry does not tell you the direction. Options are complex, and sellers can lose far more than the premium they received. This is not investment advice; check each exchange's official notices for expiry schedules and settlement methods.
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