Coin-margined contract, also known as inverse contract, are settled in cryptocurrency. XT Coin-margined contract support perpetual contract.
Coin-margined Swaps are a kind of digital currency derivatives. Users can make a profit from the rising/falling of digital currencies prices by going long or selling short based on their own judgment. Similar to a margin spot market, its price is close to the price of the underlying reference index. The main mechanism for anchoring spot prices is the cost of funds.
Coin-margined Swaps have no delivery date. Users can always hold it. Coin-margined Swaps are settled every 8 hours. After each settlement, the realized profit/loss and unrealized profit/loss are transferred to the user account balance.
Coin-margined contracts have the following features:
Coin-margined contracts are priced and settled in the underlying cryptocurrency without holding stablecoins as margin. And the profits can contribute to users’ long-term stack.
Furthermore, as prices continue to rise, the value of users’ collateral will increase correspondingly. This is simply a great way to increase users’ cryptocurrency holdings over the long run.
Users can also hedge positions in the futures market without converting any of the holdings into USDT. As such, they do not need to sell any cryptocurrencies at a compromised price.
To hedge, simply open a short position in any Binance Coin-margined quarterly futures. If the price of the underlying asset goes down, profits from the futures position can offset users portfolio’s losses.