Many friends still find contract trading a bit confusing, so today I want to systematically discuss the differences between USDT-margined and coin-margined contracts to help clarify your thinking.

Crypto market contract trading is mainly divided into two categories: one is USDT perpetual contracts, and the other is coin-margined perpetual and delivery contracts. Different contracts suit different traders; the key is to find the method that works best for you.

First, let's talk about USDT-margined perpetual contracts. These contracts use stablecoins like USDT or USDC as the pricing unit, have no expiration date, and trading pairs look like BTCUSDT, ETHUSDC. The biggest advantage? Profits and losses are directly calculated in USD, so no conversion is needed, making it especially easy for beginners to get started. For example, if you go long on BTC and make a profit, you see the USDT earnings directly; if you lose, you clearly see how much USD you lost. But the downside is, your profits are always in stablecoins, which might cause you to miss out on the appreciation of the underlying asset itself.

Next, let's look at coin-margined contracts, which follow a different approach. They use the cryptocurrency itself as the settlement and pricing unit, such as BTCUSD, ETHUSD. Coin-margined contracts are divided into two types: perpetual contracts (no expiration date) and delivery contracts (with a fixed expiration date, like BTCUSD0628). The benefit of coin-margined contracts is that your profits are tied to the underlying asset, making them especially suitable for long-term holders. They can also be used to hedge spot market risks, a common strategy among institutional investors. The drawback is that trading amounts need to be converted, making operations a bit more complex than USDT-margined contracts.

Let me give you some real-world scenarios to make it easier to understand.

Scenario 1: You believe BTC will rise in the short term, so you go long with a USDT perpetual contract. Entry price is $60,000, holding 1 BTC, with 10x leverage (margin only $6,000 USDT). If BTC rises to $61,000, you earn $1,000 USDT. If it drops to $59,000, you lose $1,000 USDT. This approach is suitable for short-term traders because profits and losses are very straightforward.

Scenario 2: You hold 1 BTC spot at a cost basis of $60,000 but are worried about a market decline. You can hedge with a coin-margined perpetual contract. Same entry price of $60,000, with 5x leverage (margin of 0.2 BTC). If BTC drops to $50,000, your spot loses 10,000 USDT, but the short contract can profit 0.2 BTC to offset the loss. This is the beauty of hedging, especially suitable for long-term holders protecting their assets.

Scenario 3: You notice that the BTCUSD0627 delivery contract is priced at $59,000, while the spot price is $60,000 (a discount), so you buy the contract to hold until expiration. If at expiration the spot price remains at $60,000, you make a profit of $1,000, equivalent to 0.0169 BTC. This arbitrage strategy is more suitable for professional traders.

For beginners, how to choose between USDT-margined and coin-margined? Honestly, it’s not just about personal preference but also about current market conditions. When market volatility is high, USDT contracts can effectively reduce risk. My advice is for beginners to start with USDT perpetual contracts—simple operation and manageable risk; once you’re familiar with the market, consider using coin-margined contracts for hedging or value-added strategies.

In fact, choosing the right contract type is like finding a trading method that suits you. Take your time exploring, and you’ll find that each type of contract has its own uses.