Coinlocally Docs
Perpetual Contracts
Perpetual Contracts
  • Introduction
  • Overview
    • Funding Rate
    • Mark Price
    • Index Price
    • Ladder Balancing Mechanism
    • Insurance Fund
    • Auto-Deleveraging (ADL)
  • USDT Margined Perpetual Contract
    • Introduction
    • Leverage and Position Limit
    • Ladder Maintenance Margin Rate
    • Margin and Profit/Loss Calculations
  • Coin Margined Perpetual Contracts
    • Currency Standard Perpetual Contract
    • Leverage and Position Limit
    • Ladder Maintenance Margin Rate
    • Margin and Profit/Loss Calculations
  • Functions
    • Perpetual Contract User Guide
    • One-way and Two-way Positions
    • Conditional Order
    • Take Profit, Stop Loss TP/SL
    • Take Profit Stop Loss Order
    • Contract Grid
    • Futures Copy
      • How to Carry Out a Transaction
      • Profit Sharing
      • How to Copy Trade
      • Futures Copy Trading Rules
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On this page
  • Margin and Contract Specifications
  • 1. Margin Currency
  • 2. Risk Exposure from Collateral Depreciation
  • 3. Valuation Unit
  • 4. Contract Face Value
  • 5. Profit and Loss Settlement Currency
  • Summary Table
  1. Coin Margined Perpetual Contracts

Currency Standard Perpetual Contract

Margin and Contract Specifications

1. Margin Currency

USDT-Margined Perpetual Contracts

  • Use USDT as the margin and settlement currency.

  • Users only need to hold USDT to open and maintain positions across all contract types (e.g., BTC/USDT, ETH/USDT).

  • Collateral value remains stable, as USDT is a stablecoin.

Coin-Margined Perpetual Contracts

  • Use the underlying asset (e.g., BTC) as the margin.

  • Users must hold and deposit the corresponding coin to trade (e.g., BTC for BTC/USD contracts).

  • Collateral value fluctuates in tandem with market prices, introducing an additional layer of risk.

2. Risk Exposure from Collateral Depreciation

Due to the differences in collateral currencies, the risk exposure during a market downturn differs:

  • In coin-margined contracts, if the price of the underlying asset drops (e.g., BTC), the required margin in BTC increases, and the value of the held collateral decreases, amplifying risk.

  • In USDT-margined contracts, the value of the collateral (USDT) remains constant in USD terms, providing greater stability in volatile markets.

3. Valuation Unit

  • USDT-margined contracts are denominated and settled in USDT.

  • Coin-margined contracts are denominated in USD but settled in the underlying asset.

Example:

  • BTC/USDT: Uses BTC/USDT spot price as its index, calculated from BTC-to-USDT trades across major exchanges.

  • BTC/USD: Uses BTC/USD spot price from exchanges quoting BTC in USD.

4. Contract Face Value

  • USDT-Margined Contract: Each contract represents a fixed quantity of the underlying asset. Example:

BTC/USDT Contract Face Value=0.001 BTC\text{BTC/USDT Contract Face Value} = 0.001\ \text{BTC}BTC/USDT Contract Face Value=0.001 BTC

  • Coin-Margined Contract: Each contract is typically valued in USD terms. Example:

BTC/USD Contract Face Value=100 USD\text{BTC/USD Contract Face Value} = 100\ \text{USD}BTC/USD Contract Face Value=100 USD

5. Profit and Loss Settlement Currency

  • USDT-Margined Contracts:

    • Profit and loss (PnL) are calculated and settled in USDT.

  • Coin-Margined Contracts:

    • PnL is calculated and settled in the underlying coin.

    • For example, profits from a BTC/USD contract are settled in BTC.

Summary Table

Feature
USDT-Margined Contracts
Coin-Margined Contracts

Collateral Currency

USDT

Underlying Coin (e.g., BTC)

Price Stability

Stable

Volatile (coin-dependent)

Settlement Currency

USDT

Underlying Coin

Valuation Unit

USDT

USD

PnL Settlement

USDT

Underlying Coin

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Last updated 1 month ago