In these situations, traders need to react quickly to hedge their exposure via a futures contract to protect themselves against downside risk. In this period, investors saw the value of their BTC holdings fall dramatically and on March 12, 2020, Bitcoin marked one of its worst trading days in history after a price plunge of more than 40% in a single day. These trends may persist for months before stabilizing.įor instance, Bitcoin experienced a prolonged bear market in the second half of 2019 before recovering in early 2020. Unlike stablecoins such as USDT, most cryptocurrencies experience high volatility several times in a year. Y ou have to enforce tighter risk controls when trading COIN-margined futures as the underlying collateral is often exposed to price volatility. If the price of the underlying asset goes down, profits from the futures position can offset your portfolio’s losses. To hedge, you can simply open a short position in any Binance Futures’ COIN-margined quarterly futures.
As such, they do not need to sell any cryptocurrencies at a compromised price. With COIN-margined futures, miners and long-term investors can also hedge their positions in the futures market without converting any of their holdings into USDT. Furthermore, as prices continue to rise, the value of your collateral will increase correspondingly, representing a great way to increase your cryptocurrency holdings over the long run. As contracts are settled in the underlying cryptocurrency, any profits can contribute to your long-term stack. Especially in this bull market today, investors are more inclined to hold on to their cryptocurrencies. If you are a miner or a long-term investor, this is ideal for you. Therefore, you do not need to convert Bitcoin to a quote asset such as Tether (USDT). To open a position in BTCUSD Quarterly 1225, you can simply fund the initial margin in Bitcoin. No Expiration Date - You can hold positions without an expiry date and do not need to keep track of various delivery months, unlike traditional futures contracts.Ĭlear Pricing Rules - Each futures contract specifies the base asset's quantity delivered for a single contract, also known as "Contract Unit." For instance, BTC/USDT, ETH/USDT, and BNB/USDT futures contracts represent only one unit of its respective base asset, similar to spot markets.īinance Futures’ COIN-margined contracts are denominated and settled in its base currency. Settlement in USDT - Contracts are denominated and settled in USDT, providing a versatile settlement currency across the USDT-margined futures product line. On the other hand, USDT-margined contracts offer the following characteristics: For example, 1,000 USD of BTCUSD Quarterly 1225 (100 USD x 10 contracts) and 1,000 USD of ETHUSD Quarterly 1225 (10 USD x 100 contracts).Įxpiration - Perpetual, Quarterly, and Bi-Quarterly Each BTC futures contract represents 100 USD while each ETH futures contract represents 10 USD.
Settlement in Crypto - Contracts are denominated and settled in the underlying cryptocurrency, eliminating the need to hold stablecoins as collateral.Ĭontract Multiplier - Contract multiplier represents the value of a contract. COIN-margined contracts on Binance Futures offer the following characteristics:
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