Definition and Core Concepts of Coin-Margined Futures
Coin-Margined Futures (Coin-Margined Futures) are derivative contracts where the underlying cryptocurrency (e.g., BTC, ETH) serves as the denomination, settlement, and collateral. Key features include:
- Denomination Unit: USD
- Common Trading Pairs: BTCUSD (BTC-settled), ETHUSD (BTC-settled)
- Settlement Method: Profits/losses are settled in the collateral currency (e.g., long BTCUSD gains BTC).
- Contract Types: Perpetual (no expiry) or Quarterly/Delivery (fixed expiry).
Coin-Margined Futures vs. Delivery Contracts
| Comparison | Coin-Margined Perpetual | Coin-Margined Delivery |
|---------------------------|-----------------------------------|-------------------------------------|
| Expiry | None | Fixed (e.g., BTCUSD-20240628) |
| Settlement | Funding Rate Mechanism | Spot Price at Expiry |
| Use Case | Long-term Holding, Arbitrage | Hedging, Institutional Coverage |
Pros and Cons
Advantages:
- Double Gains: Profit in BTC if BTC rises.
- Hedging: Short contracts hedge spot holdings.
- Lower Funding Rates: Typically cheaper than USD-M contracts.
Disadvantages:
- Complex Calculations: Requires currency conversion.
- Higher Liquidation Risk: Collateral value drops faster during crashes.
Trading Parameters
Key parameters for Bitget’s Coin-Margined Futures:
| Parameter | Description |
|------------------------|---------------------------------------------------------------------------------|
| Leverage | Adjustable (10x–100x), affects margin and liquidation price. |
| Margin Mode | Cross (shared margin) or Isolated (per-position margin). |
| Taker Fee | 0.028%–0.042%, varies by account tier. |
| Maker Fee | 0.0072%–0.014%, varies by account tier. |
| Funding Rate | Paid every 8 hours for perpetuals; none for delivery contracts. |
| Index Price | Weighted average of spot prices from major exchanges. |
Order Types and Execution
Order Types
| Type | Description |
|----------------|---------------------------------------------------------------------------------|
| Limit | Executes at specified price (e.g., BTCUSD at $60,000). |
| Market | Executes at best available price instantly. |
Execution Rules
- GTC (Good Till Cancel): Active until filled or canceled.
- IOC (Immediate or Cancel): Fills partial orders; cancels remainder.
- FOK (Fill or Kill): Entire order fills or cancels.
Example:
For Bitget’s BTCUSD0627 delivery contract, if the settlement price is $70,000, the seller delivers 5 BTC at this price. Positions can be closed pre-expiry.
Funding Fees and Pricing
Funding Fee Formula
Funding Fee = Position Value × Funding Rate- Funding Rate = Premium Index (P) + Clamp(Interest Rate (I) − P, a, b).
- Updated every 8 hours for perpetuals.
👉 Learn more about funding rates
Index and Mark Prices
- Index Price: Weighted average of spot prices.
Mark Price (Perpetual/Delivery):
Mark Price = Index Price + N-minute Moving AverageUsed for liquidation triggers and unrealized P&L.
Risk Management
Key Mechanisms
- Margin Call: Triggered when margin ratio ≤ maintenance level.
- Liquidation: Occurs if MMR ≥ 100%. ADL/Insurance Fund covers losses if needed.
FAQ
1. Difference between Coin-Margined and USD-Margined?
- Coin-Margined: Crypto-denominated; USD-Margined: USDT-denominated.
2. Avoiding Liquidation?
- Maintain sufficient margin, use stop-loss, and reduce leverage.
3. Impact of Funding Fees?
- Deducted from balance every 8 hours, affecting net position value.
4. Delivery Contract Expiry?
- Auto-settled at spot price; positions forcibly closed.
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