Coin-margined contracts have gained popularity among investors interested in derivative trading. As a type of reverse contract, these require Bitcoin as collateral, with all fees—including transaction costs, funding rates, and unrealized profits/losses—settled in BTC. This guide provides a clear tutorial for operating coin-margined contracts.
Key Features of Coin-Margined Contracts
- Collateral: Bitcoin is used as margin.
- Settlement: All fees and profits are paid in BTC.
- Leverage: Typically ranges from 10x to 20x.
Step-by-Step Operation Guide (Using OKX Exchange as Example)
1. Fund Transfer
Transfer assets from your spot account to the derivatives account:
- Navigate to "Assets" > "Contract Account."
- Select the amount to transfer.
- Confirm the transaction.
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2. Contract Settings
Configure these critical parameters to avoid liquidation:
- Pricing Currency: USD
- Unit: Set to the traded coin (e.g., BTC) or contracts (1 contract = $100 BTC).
- Margin Mode: Isolated margin (recommended for beginners).
- Leverage: 10x for low risk; 20x for experienced traders.
3. Placing Orders
Limit Order Example:
- Choose "Buy/Long" (bullish) or "Sell/Short" (bearish).
- Select leverage (e.g., 10x).
Enter price manually or use:
- Last Price: Current market rate.
- Counter Price: Best available bid/ask.
- Input quantity and confirm.
4. Monitoring Positions
- Check "Holdings" for open positions.
- View "Orders" for pending trades.
- Adjust margins if nearing liquidation.
Risk Management Tips
- Use stop-loss orders to limit downside.
- Avoid overleveraging; start with 10x.
- Prefer major coins (BTC, ETH) for better liquidity.
Why Choose Coin-Margined Contracts?
- Lower fees compared to USD-margined contracts.
- Direct exposure to BTC price movements.
- Ideal for hedging spot holdings.
FAQs
Q1: What’s the difference between coin-margined and USD-margined contracts?
A1: Coin-margined contracts use BTC as collateral, while USD-margined ones use stablecoins. Profits/losses are settled in the respective currencies.
Q2: How does leverage affect my position?
A2: Higher leverage increases both potential gains and risks. A 10x leverage means a 10% price move can double or wipe out your margin.
Q3: Can I change my margin mode after opening a position?
A3: No. Margin mode can only be adjusted when no positions are active.
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Final Advice
Always trade on reputable exchanges like OKX or Binance. Verify platform legitimacy through:
- Website accessibility
- Regulatory licenses
- Trading volume and pairs offered
This guide equips you with foundational knowledge to navigate coin-margined contracts confidently. Trade wisely!