When trading futures on OKX, users are presented with two primary contract types: USDT-margined contracts and coin-margined contracts. While both allow you to speculate on cryptocurrency price movements, they differ significantly in terms of margin currency, profit calculation, settlement methods, and ideal use cases. Understanding these differences is crucial for effective risk management, accurate profit tracking, and aligning your trading strategy with your asset structure.
Whether you're a short-term trader focused on stable returns or a long-term holder aiming to accumulate more BTC or ETH, choosing the right contract type can enhance your trading efficiency and financial clarity.
What Are USDT-Margined and Coin-Margined Contracts?
Before diving into the differences, let’s clarify what each contract type means on OKX.
USDT-Margined Contracts (Linear Contracts)
Also known as linear futures, USDT-margined contracts use USDT (a stablecoin) as both the margin and the profit/loss settlement currency. This means:
- You deposit USDT to open a position.
- All profits and losses are calculated and settled in USDT.
- Whether you're trading BTC, ETH, or any other cryptocurrency, your P&L is always displayed in a stable, dollar-equivalent value.
This makes it easier to track performance without worrying about volatility in the underlying asset affecting your account balance's perceived value.
Coin-Margined Contracts (Inverse Contracts)
These are also referred to as inverse futures. In this model:
- The underlying cryptocurrency itself (e.g., BTC or ETH) serves as the margin.
- Profits and losses are calculated and paid out in the same crypto asset being traded.
- For example, if you trade a BTC coin-margined contract, your gains or losses will be reflected directly in your BTC balance.
Because the settlement is in crypto, the fiat value of your profits fluctuates along with market prices — even after closing the trade.
Core Differences Between the Two Contract Types
Understanding these distinctions helps traders choose the most suitable instrument based on their goals.
1. Margin Currency
| Feature | USDT-Margined | Coin-Margined |
|---|
- Uses USDT as margin | ✅ | ❌
- Uses crypto (BTC/ETH) as margin | ❌ | ✅
If you hold most of your portfolio in stablecoins, using USDT-margined contracts avoids unnecessary conversions. Conversely, if you're bullish on holding more BTC long-term, coin-margined contracts let you grow your holdings directly.
2. Profit & Loss Denomination
- USDT-margined: P&L shown in USDT, making it easy to assess real-world value.
- Coin-margined: P&L shown in BTC, ETH, etc., so while you may gain more coins, their USD value depends on future price action.
For instance:
Suppose you profit 0.005 BTC from a coin-margined trade. If BTC later drops from $60,000 to $50,000, your profit loses $500 in fiat value — despite having earned more BTC.
3. Settlement Mechanism
- USDT-margined contracts settle in stablecoin, offering predictable outcomes.
- Coin-margined contracts settle in volatile assets, introducing secondary exposure to price swings post-trade.
This makes coin-margined contracts riskier for traders who want to lock in gains without further market exposure.
4. Ideal User Profiles
| Trader Type | Recommended Contract |
|---|
- Short-term scalpers or day traders | USDT-margined |
- Traders seeking stable P&L tracking | USDT-margined |
- Long-term crypto bulls aiming to accumulate BTC/ETH | Coin-margined |
- Hedgers already holding large amounts of crypto | Coin-margined |
Does It Affect How Profits Are Calculated?
Yes — the calculation method differs due to the settlement currency.
USDT-Margined Profit Formula
Profit = Number of Contracts × (Exit Price - Entry Price) × Contract Value / Exit PriceAll results are denominated in USDT, providing consistent valuation regardless of crypto price swings after settlement.
Coin-Margined Profit Formula
Profit = Number of Contracts × Contract Value × (1/Entry Price - 1/Exit Price)Results are expressed in the base cryptocurrency, meaning your profit's dollar worth changes with ongoing market trends.
For example:
- Open BTC position at $60,000
- Close at $65,000
- Profit ≈ 0.00128 BTC
- If BTC then falls to $60,000 again, your profit drops in USD value by ~8%
This introduces an element of post-trade market risk not present in USDT-settled contracts.
Which One Should You Choose?
Your choice should reflect three key factors:
- Asset Allocation: Do you hold mostly stablecoins or crypto?
- Trading Strategy: Are you aiming for quick profits or long-term accumulation?
- Risk Tolerance: Can you accept continued volatility affecting your realized gains?
Choose USDT-Margined If:
- You prefer clear, stable profit reporting
- You trade multiple assets and want unified accounting
- You're executing high-frequency or algorithmic strategies
- You plan to withdraw profits immediately
Choose Coin-Margined If:
- You believe crypto prices will rise long-term
- You want to increase your BTC or ETH holdings through trading
- You already hold large amounts of a specific coin and don’t mind using it as collateral
- You're hedging spot positions
Can You Use Both Contracts Simultaneously?
Absolutely. OKX allows traders to maintain both USDT-margined and coin-margined accounts at the same time.
However, important notes:
- Funds are not shared between account types
- You must manually transfer assets if switching between them
- Use OKX’s internal transfer or instant swap features to move value efficiently
Frequently Asked Questions (FAQ)
Q: Is one contract type more profitable than the other?
A: Neither is inherently more profitable. Returns depend on market movement and strategy. However, USDT-margined contracts offer more predictable outcomes, while coin-margined ones add exposure to future price changes.
Q: Can I lose more than my initial investment?
A: On OKX, both contract types feature mark price-based liquidation mechanisms, which help prevent excessive losses. With proper risk controls like stop-losses, you can manage downside effectively.
Q: Do funding rates differ between the two?
A: Yes. Funding rates vary by contract and are influenced by market demand. Always check current rates before opening a position.
Q: Are leverage levels the same for both types?
A: Leverage ranges depend on the specific instrument but are generally comparable across both types — often up to 125x for major pairs.
Q: Which is better for beginners?
A: Most beginners find USDT-margined contracts easier due to stable valuation and simpler P&L tracking.
Q: Does volatility affect settlement?
A: For USDT-margined contracts, no — settlement is fixed in stablecoin. For coin-margined, yes — the USD value of your crypto-denominated profits fluctuates with the market.
By understanding the mechanics of USDT-margined vs coin-margined contracts, you can make informed decisions that align with your financial goals and risk profile. Whether you're focused on stability or long-term growth, OKX provides flexible tools to support diverse trading styles — just ensure you choose the right contract type for your needs.