An Overview of HTX Futures Products

In addition to launching various cryptocurrency derivatives instruments, HTX Futures also provides investors and traders with multiple ways to enter the contract market.

In general, HTX Futures offers the following 3 product lines:

USDT-margined contract - supports perpetual contracts and quarterly delivery contracts, settled in USDT. Learn more about USD contracts.

Coin-margined contracts - supports perpetual contracts and quarterly delivery contracts, settled in cryptocurrency. Learn more about coin-margined contracts.

Options - Simplified options trading for retail investors. With built-in leverage, users can maximize returns while minimizing corresponding risks.

 

1.USDT-margined contract

HTX Futures is not an inverse contract, but a linear futures product quoted and settled in USDT, which is a stable currency pegged to the value of the U.S. dollar.

The biggest advantage of USD-settled contracts is that you can simply calculate returns in fiat. This makes U-based contracts more intuitive. For example, when you earn 500USDT, you can simply assess that this gain is almost worth $500 - since 1USDT is worth approximately $1.

USDT-margined contracts have the following characteristics:

  1. in USD Ⓢ: The contract is priced and settled in USDT ;

  2. Maturity period: perpetual, quarterly and weekly;

  3. Funding fees: U-margined perpetual contracts will incur funding fees. Funding fees are transferred between traders and are charged every eight hours.

Remark:

[Reduce only] orders for a single position will not be affected.

 

2. Coin-margined contracts

COIN-margined perpetual contracts are a type of derivative that derives their value from an underlying cryptocurrency. They are an alternative way to gain exposure to a cryptocurrency without having to own it.

(1)Coin-margined contracts: perpetual contracts vs traditional contracts

Traditional futures have expiration dates, and trading them means that you own the contract within a given timeframe.

For example, if you go long 1,000 BTC Quarterly 0930 futures contracts for $12,000 and hold those contracts through expiration in December, and the contract settles at $13,500 at expiration, then you will get paid out $12,500 in Bitcoin.

It is important to note that traditional futures contracts have a tendency to trade at higher or lower prices than the index price. This difference is also known as the futures’ basis. Basis only applies to quarterly contracts because they expire, and users are required to roll over to another contract in a further-out month.

In contrast, perpetual futures contracts have no expiration. These products have a funding period every eight hours, which keeps futures’ trading prices close to the index price. Based on the price difference between the index price to its perpetual futures price, traders holding long positions will pay a small fee to traders holding short positions, or vice versa, keeping futures prices close to the index.

(2)What Are COIN-Margined Perpetual Contracts?

COIN-margined perpetual contracts are a type of derivative that derives their value from an underlying cryptocurrency. They are an alternative way to gain exposure to a cryptocurrency without having to own it.

With perpetual contracts, you can trade cryptocurrencies with leverage, which means you can magnify small movements in price to potentially generate outsized profits.

Just like USDT-margined perpetual contracts, COIN-margined perpetual contracts do not have an expiry date. Therefore, users do not need to keep track of various delivery months.

 

3. How Are COIN-Margined Perpetual Contracts Quoted?

The Coin-margined perpetual contract of HTX uses the coin of the current trading pair as its margin. For example, the BTCUSD perpetual contract has Bitcoin as its base coin. Each COIN-margined contract represents 100 USD and as such, USD is the denomination currency. Since each contract represents a fixed quantity of USD, this means Bitcoin is used to fund the initial margin or calculate profit and loss.

Let’s take a look at an example:

Assume you purchased 100 Bitcoin-margined perpetual contracts (100 x 100 USD = $10,000) at $12,000 each. By doing this, you are essentially selling USD 10,000 and buying an equivalent value of Bitcoin (10,000/12,000 = 0.83 BTC).

Suppose Bitcoin’s price rose to $14,000, and you want to secure profits from the trade. To close the position, you buy back USD 10,000 worth of contracts and simultaneously sell the equivalent of Bitcoin (10,000/14,000 = 0.71 BTC).

In this trade, your profit will be calculated as such: Quantity of Bitcoins at Entry - Quantity of Bitcoins at Close = 0.83 - 0.71 = 0.12 BTC.

Unlike USDT-margined contracts, P&L for COIN-margined contracts is calculated in the respective cryptocurrency (i.e. BTC).