What Are Coin-Margined and USDT-Margined Contracts? Key Differences Explained

OKX's contract products can be categorized into coin-margined contracts and USDT-margined contracts based on their margin systems:

Coin-Margined Contracts (Reverse Contracts):
- Priced in USD
- Collateral and P&L calculated in the underlying cryptocurrency (e.g., BTC, ETH)
USDT-Margined Contracts (Forward Contracts):
- Priced in USDT
- Collateral and P&L calculated in USDT

Key Differences Between Contract Types

1. Pricing Units

USDT Contracts: USDT-denominated pricing (e.g., BTC/USDT reflects BTC's USDT value)
Coin Contracts: USD-denominated pricing (e.g., BTC/USD reflects BTC's USD value)

2. Contract Specifications

Feature	USDT Contracts	Coin Contracts
Contract Value	Underlying crypto (e.g., 0.001BTC)	Fixed USD amount (e.g., $100)
Collateral Asset	USDT	Underlying crypto (e.g., BTC)
P&L Calculation	USDT	Underlying crypto

3. Profit Characteristics

USDT Contracts: Linear returns (1:1 with price movement)
Coin Contracts: Convex returns (amplified gains/losses with price trends)

Practical Use Cases

🔻 Bear Market Strategies

👉 Maximize profits in downtrends with USDT shorts

When anticipating price declines:
- **USDT Contracts**: 10% price drop → 10% USDT profit
- **Coin Contracts**: 10% price drop → 9% BTC profit (after USD conversion)

🔺 Bull Market Strategies

When expecting price rallies:
- **Coin Contracts**: 10% price rise → 11% BTC profit
- **USDT Contracts**: 10% price rise → 10% USDT profit

Strategic Selection Guide

Trend Trading:
- Bull markets: Coin-margined longs
- Bear markets: USDT-margined shorts
User Profiles:
- Coin Contracts: Miners/hedgers holding long-term crypto positions
- USDT Contracts: Fiat-based traders prioritizing simplicity

👉 Explore both contract types on OKX

FAQ

Q1: Which contract has lower fees?

Both contract types share identical fee structures on OKX.

Q2: Can I switch between contracts easily?

Yes, OKX allows separate positions for each contract type within the same account.

Q3: How does liquidation work differently?

Liquidation risks are comparable, but coin contracts require monitoring the collateral crypto's volatility.

Q4: Which is better for beginners?

USDT contracts are typically simpler for new traders due to stablecoin-denominated P&L.

Q5: Do both support all cryptocurrencies?

Most major coins (BTC, ETH, XCH, etc.) are available for both, but check specific pairs.

Q6: How are funding rates affected?

Funding calculations differ slightly due to pricing currencies but follow similar mechanisms.