I. Definitions
1. Definition of Coin-Margined Standard Futures
Coin-Margined Standard Futures use the underlying asset (such as BTC and ETH) as margin for position opening, PnL and fee settlement, etc.
2. Definition of USDT-Margined Standard Futures
USDT-Margined Standard Futures use USDT as margin for position opening, PnL and fee settlement, etc.
II. Calculation Comparison
1. Calculation of Coin-Margined Standard Futures
PnL = Transaction Direction * Trade Size * Open Price * (1 / Open Price - 1 / Close Price)
Liquidation Price in Isolated Margin Mode = Transaction Direction * Trade Size * Open Price / (0.9 * Margin + Transaction Direction * Trade Size - Trading Fee - Funding Fee)
2. Calculation of USDT-Margined Standard Futures
PnL = Transaction Direction * Trade Size * (Close Price - Open Price) / Open Price
Liquidation Price in Isolated Margin Mode = Open Price + Open Price * (Funding Fee + Trading Fee - 0.9 * Margin) / (Transaction Direction * Trade Size)
All other calculations that do not involve PnL and Liquidation are the same.
III. Advantages
1. Advantages of Coin-Margined Standard Futures
(1) Increase in Cumulative Asset Value
Coin-Margined Standard Futures are denominated and settled in the underlying cryptocurrency. This presents an opportunity for miners and cryptocurrency holders to accumulate profits over time. Additionally, as the price of the cryptocurrency rises, the value of the margin increases, allowing users to grow their crypto holdings.
(2) Amplified Returns & Mitigated Risks
When the market price is moving in your favor: (i) if the price rises, long position holders can reap trading profits while enjoy the value appreciation of the underlying cryptocurrency, resulting in double benefits; (ii) if the price drops, short positions yield a higher profit rate compared to USDT-Margined Standard Futures. Note: Users can use the Futures Calculator to perform trial calculations.
2. Advantages of USDT-Margined Standard Futures
(2) Greater Trading Flexibility
As a widely accepted settlement currency, USDT can significantly improve trading flexibility. It allows multiple futures contracts to be settled in the same currency, eliminating the need to purchase other underlying tokens and saving unnecessary costs.
(3) Reduced Risk of Price Volatility
USDT-Margined Standard Futures effectively mitigate the risks associated with drastic market price fluctuations.