What Are USDT-Margined Contracts? A Detailed Guide to Fees

USDT-margined contracts, also known as "U本位合约" in Chinese trading circles, refer to derivative agreements where USDT (Tether) serves as:

The collateral (保证金)
The settlement currency for both position opening and final delivery

In these contracts, all calculations—whether for BTC, ETH, or other cryptocurrencies—are denominated in USDT. Traders must deposit USDT into their accounts before executing trades.

How USDT-Margined Contract Fees Work

Exchange fees vary significantly. Below is Binance's fee structure as a representative example:

Funding Fee Calculation

Settlement Amount = Position Nominal Value × Funding Rate
Position Nominal Value = Mark Price × Contract Quantity Held

The funding rate comprises two components:

Interest Rate (固定利率):
- Default: 0.03% daily (0.01% per funding interval)*
- Adjusted based on market conditions (e.g., federal funds rate)
*Exceptions: LINK/USDT, LTC/USDT, and BNB/USDT pairs have 0% interest.
Premium Index (溢价指数):
```
P = [Max(0, Impact Bid Price − Mark Price) − Max(0, Mark Price − Impact Ask Price)] / Spot Price
```
- Compensates for price divergences between perpetual contracts and spot markets
- Calculated per second, time-weighted averages used for funding intervals

Final Funding Rate Formula

F = P + Clamp(0.01% − P, −0.05% to 0.05%)

👉 Learn how to optimize funding fee strategies

Key Differences: USDT vs. Coin-Margined Contracts

Feature	USDT-Margined Contracts	Coin-Margined Contracts
Collateral	USDT only	Underlying crypto (e.g., BTC for BTC)
Settlement	Profits/losses in USDT	Profits/losses in the native coin
Stability	More predictable valuation	Exposure to coin price volatility
Use Case	Short positions & cross-margining	Long-term holdings & hedging

FAQs

Q: Why choose USDT-margined contracts?
A: They reduce volatility risk by pegging all values to a stablecoin, simplifying profit/loss tracking.

Q: How does the premium index affect traders?
A: High premiums may indicate overbought conditions, signaling potential reversals—useful for timing entries/exits.

Q: Can I switch between contract types easily?
A: Most exchanges allow separate wallets for each type, but transfers between them incur conversion fees.

Risk Management Tips

Monitor funding rates—negative rates may suggest favorable shorting conditions.
Diversify collateral—avoid overexposure to USDT’s peg risks.
Use stop-loss orders—critical given crypto’s 24/7 volatility.

👉 Explore advanced contract trading tools

Disclaimer: Trading derivatives involves substantial risk. This content is educational only and not financial advice.