USDT-margined contract is a kind of digital asset derivatives. Users can make profits from the rising/falling price of digital assets by going long or selling short positions based on their own judgment. Denominated in USDT, HTX USDT-margined contract includes USDT-margined swaps and USDT-margined futures.

 

USDT-margined Swaps

Similar to a margin spot market, its price is close to the index price of the underlying asset. The main mechanism for anchoring the spot price is based on funding fee. There is no expiration date for USDT-margined swaps. The USDT-margined swaps are settled every 8 hours, and the current-period funding fee and unrealized PnL will be merged into the realized PnL after the settlement and transferred to the user's account balance.

USDT-margined Futures

There is an expiration date for each USDT-margined future and no funding  fees will be incurred. When a futures contract expires, all open positions will be closed at the arithmetic mean value of the index price during the last hour, implementing spread delivery rather than physical delivery.

 

Mechanism for USDT-margined Contract

USDT-margined contracts implement price-time-priority algorithm, the earliest active buy order at the highest price takes priority over any subsequent order at that price, which in turn takes priority over any active buy order at a lower price. When the margin ratio is equal to or less than 0, liquidation will be triggered for the position.

• The formulas are as below:

Isolated Margin Ratio = Account Equity / Occupied Margin * 100% – Adjustment Factor;

Cross Margin Ratio = Account Equity / ∑All Contracts in the Cross Margin Account (Occupied Margin * Adjustment Factor）– 100%

 

Isolated and Cross Margin Mode

• Isolated Margin Mode

A special kind of cross margin mode under which the margin is calculated separately for each contract, that is, all the assets in the isolated margin account will be used as the margin for positions of the same contract; The account equity and PnL of each contract are calculated separately, and the position margin and PnL of each contract will not affect each other as well.

Assume Tom holds a position of BTC/USDT swaps and a position of ETH/USDT swaps in the isolated margin account at the same time. If the margin ratio of the BTC/USDT swaps account is equal to or less than 0% and liquidation is triggered, there will be no assets in this isolated account anymore. At this time, the isolated position of ETH/USDT swaps could be held continually without being affected by the liquidation of BTC/USDT swaps.

• Cross Margin Mode

All contracts in the cross margin mode share the same account equity, and some data such as their PnL, occupied margin and margin ratio are calculated jointly.

Assume Jack holds a position of BTC/USDT swaps, ETH/USDT swaps and BTC/USDT weekly futures separately in cross margin account. Then the USDT assets in the cross margin account will be the margin for these three contracts. The margin ratio of these three contracts is calculated jointly as well. Therefore, when the margin ratio of the cross margin account is equal to or less than 0 %, liquidation maybe be triggered for the positions of these three contracts in the cross margin account.

Please Note: USDT-margined swaps support both cross margin and isolated margin mode at the same time. The margin for these two kinds of accounts is calculated separately. While USDT-margined futures only support cross margin mode. Under the cross margin mode, USDT-margined swaps share the same margin in the cross margin account with USDT-margined futures.

 

 

Hedge Mode and One-way Mode

In hedge mode, you can hold positions in both long and short directions simultaneously under the same contract, so as to hedge risks of two positions with different directions.

In one-way mode, you can only hold a position in one direction under one contract. Meanwhile, you are available to choose the Reduce-only order type, which only serves to reduce your position amount and ensure not to increase your position by avoiding placing reverse orders.

 

 

Types of USDT-margined Futures

At most four types of USDT-margined futures are available on HTX Futures, including weekly, bi-weekly, quarterly and bi-quarterly USDT-margined futures.

Weekly USDT-margined futures will be delivered on the Friday closest to the trading day;

Bi-weekly USDT-margined futures will be delivered on the secondary Friday closest to the trading day;

Quarterly USDT-margined futures will be delivered on the last Friday of the last month in the quarter closest to the trading day (Mar, Jun, Sep and Dec), and the delivery date shall not be coincided with weekly/bi-weekly USDT-margined futures.

Bi-quarterly USDT-margined futures will be delivered on the last Friday of the last month in the secondary quarter closest to the trading day (Mar, Jun, Sep and Dec) and delivery date shall not be coincided by weekly/bi-weekly/quarterly USDT-margined futures.

Please Note:

1. When there are only weekly, bi-weekly, and quarterly USDT-margined futures for a certain asset, the system will normally generate new bi-weekly futures after the delivery/settlement every Friday. However, after the settlement on the third to last Friday of March, June, September, or December, there are only two weeks left for quarterly futures before the expiration date and the quarterly futures will become bi-weekly ones actually. If the system generates new bi-weekly futures at this time, there will be redundant bi-weekly futures with the same expiration date. Therefore, for quarterly futures, after delivery/settlement on the third to last Friday of March, June, September, or December, the system will generate new quarterly futures instead of bi-weekly ones. Meanwhile, the old quarterly futures become bi-weekly futures and the old bi-weekly futures become weekly futures.
2. When there are weekly, bi-weekly, quarterly and bi-quarterly USDT-margined futures for the asset, the system will normally generate new bi-weekly futures after the delivery/settlement every Friday. However, after the settlement on the third to last Friday of March, June, September, or December, there are only three months left for bi-quarterly futures before the expiration date and there are only 2 weeks left for quarterly futures before the expiration date. The quarterly futures will become bi-weekly ones actually. If the system generates new bi-weekly futures at this time, there will be redundant bi-weekly futures with the same expiration date. Therefore, for bi-quarterly futures, after delivery/settlement on the third to last Friday of March, June, September, or December, the system will generate new bi-quarterly futures instead of bi-weekly ones. Meanwhile, the old bi-quarterly futures become quarterly futures, the old quarterly futures become the bi-weekly futures, and the old bi-weekly futures become weekly futures.

 

For example:

1. Assuming there are only weekly, bi-weekly, and quarterly USDT-margined futures for a certain asset. After the settlement/delivery at 8:00 am (UTC) on Sep 11, 2020, the system will generate a new 1225 quarterly futures as there is only 2 weeks left for 0925 quarterly futures before the delivery date, and the original 0925 quarterly futures will become 0925 bi-weekly futures; and the original 0918 bi-weekly futures become 0918 weekly futures. It’s recommended for users to trade after reading the corresponding K-line chart of various contract types. The K-line of new weekly futures will stretch from that of the original weekly futures, the K-line of new bi-weekly futures will stretch from that of the original bi-weekly futures, and the K-line of new quarterly will stretch from that of the original quarterly futures.

2. Assuming there are weekly, bi-weekly, quarterly and bi-quarterly USDT-margined futures for the asset. After the settlement/delivery at 8:00 am (UTC) on Sep 11, 2020, the system will generate a new 0326 bi-quarterly futures which will expire on Mar 26, 2021 because there are only 3 months left for 1225 bi-quarterly futures before the delivery date; and the original 1225 bi-quarterly futures will become 1225 quarterly futures; and the original 0925 quarterly futures become 0925 bi-weekly futures. It’s recommended for users to trade after reading the corresponding K-line chart of various contract types. The K-line of new weekly futures will stretch from that of the original weekly futures, the K-line of new bi-weekly futures will stretch from that of the original bi-weekly futures, and the K-line of new bi-quarterly will stretch from that of the original bi-quarterly futures.

 

 

Difference between USDT-margined Contract and Coin-margined Contract

• Quotation Unit: USDT-margined contract is denominated in USDT while coin-margined contract is denominated in USD.
• Margin Currency: All pairs of USDT-margined contract use USDT as margin. Users could trade various USDT-margined contracts with USDT. All coin-margined contracts use the underlying asset of each contract as margin, therefore, users have to hold the corresponding token to trade. For example, users have to transfer BTC as margin first to trade BTC/USD swaps.Due to different margin currency, the margin depreciation risk of USDT-margined contract is distinguished from that of coin-margined contract when tokens prices fall. To be more specific, the margin of coin-margined contract will be affected by its underlying asset. However, the rise or fall of tokens’ prices won’t affect the value of USDT, so the margin of USDT-margined contract won’t be influenced as well.
• PnL Calculating Currency: All types of USDT-margined contracts use USDT to calculate PnL while coin-margined contracts use its underlying asset.