What Are Coin-Margined Contracts?
Coin-margined contracts, also known as reverse contracts, are a type of perpetual futures contract in cryptocurrency trading. Unlike USDT-margined contracts that use the stablecoin USDT as collateral, coin-margined contracts require traders to deposit the traded currency (e.g., BTC, ETH) as margin.
Key Features:
- Traded-Currency Collateral: Users must hold the specific cryptocurrency to trade its corresponding contract (e.g., BTCUSD requires BTC margin).
- Profit/Loss in Native Tokens: Gains and losses are denominated in the traded currency, not USDT.
Coin-Margined vs. USDT-Margined Contracts
| Feature | USDT-Margined Contracts | Coin-Margined Contracts |
|-----------------------|-----------------------------|-----------------------------|
| Margin Currency | USDT | Traded Currency (BTC, ETH) |
| Liquidation Mechanism | ADL, Insurance Fund | ADL, Insurance Fund |
| Price Stability | Funding Rate | Funding Rate |
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How Funding Rates Work
Funding fees ensure perpetual contract prices align with spot prices. Key points:
- No Platform Fees: Payments occur between long/short positions.
Rate Direction:
- Positive Rate: Longs pay shorts (price > spot).
- Negative Rate: Shorts pay longs (price < spot).
- Scheduled: Applied every 8 hours for open positions.
Example: If BTCUSD trades above spot, long positions fund shorts, encouraging price correction.
Who Should Use Coin-Margined Contracts?
- Experienced Traders: Ideal for those holding BTC/ETH and understanding volatility.
- Bullish Strategies: Profit from both price appreciation and rising token value.
- Risk Note: Losses amplify if markets move against positions.
For Beginners: USDT-margined contracts simplify PNL tracking with stablecoin margins.
FAQs
1. Can I trade coin-margined contracts without holding the asset?
No—you must deposit the traded cryptocurrency (e.g., BTC for BTCUSD).
2. How does leverage affect coin-margined trades?
CoinEx offers up to 100x leverage, but higher leverage increases liquidation risks.
3. Why choose coin-margined over USDT contracts?
Beneficial for bullish traders aiming to accumulate more of the underlying asset.
4. When are funding fees charged?
Every 8 hours at 00:00, 08:00, and 16:00 UTC.
5. What happens during liquidation?
CoinEx uses insurance funds and ADL to mitigate losses.
Final Tips
- Research First: Never enter trades blindly.
- Risk Management: Start with lower leverage and small positions.
👉 Explore advanced trading strategies
Disclaimer: Trading involves risks. This content is not financial advice.
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