USDT-Margined Futures Introductions – VOOX

Futures trading types

There are two main types of futures trading in the cryptocurrency space: USDT-M/USDC-M Futures and Coin-M Futures. USDT-M/USDC-M Futures can also be referred to as USDT-M/USDC-M perpetual futures, which, as the name suggests, can be held in perpetuity. Coin-M Futures are divided into Coin-M perpetual futures and Coin-M delivery futures, the latter of which has a delivery period. Investors are advised to clearly distinguish the types of futures they are trading.

USDT-M/USDC-M Futures, also known as Linear Futures, refer to futures that are settled in stable coins such as USDT and USDC. Examples of such futures are BTC/USDT and ETH/USDC.

Coin-M Futures, also known as inverse futures, refer to futures that are settled in crypto, such as BTCUSD and ETHUSD.

VOOX USDT-M Futures Underlying Trading Mechanism

1. Margin System

Margin types: USDT-M Futures trading generally uses two types of margin, initial margin and maintenance margin. Initial margin is a certain proportion of funds that investors must deposit when opening a position, to ensure the smooth performance of the contract. Maintenance margin is the minimum margin level that investors must maintain when the contract value changes unfavorably.

2. Leverage Mechanism

Leverage selection: USDT-M Futures platforms usually provide investors with a range of leverage options to choose from, while VOOX offers leverage ranging from 1 to 125 times. While high leverage can amplify investor profits, it also multiplies risks.

3. Delivery and Liquidation Mechanism

Delivery Methods: VOOX offers USDT-M Futures. Perpetual contracts do not have a fixed delivery date. They use a funding fee mechanism to anchor the contract price to the spot price to maintain market balance.

Closing Position: Investors can choose to close their positions at opportune market moments by buying or selling the same number of contracts in the opposite direction, thus ending their current position. When closing a position, the system will calculate the investor’s profit or loss based on the opening and closing prices, and transfer the profit or loss to the investor’s account in the form of USDT.

VOOX USDT-M Futures Characteristics

VOOX offers USDT-M Futures, which are both quoted and settled in USDT. The main advantage of USDT-M futures lies in the straightforward calculation of returns in fiat currency, which enhances the intuitive nature of profit assessments. For example, when you make 500 USDT in profit, you can easily estimate that the profit is worth approximately $500 - since the value of 1 USDT is pegged closely to 1 USD.

USDT-M Futures offer the following characteristics:

Settlement in USDT: Contracts are denominated and settled in USDT.
Expiration: Perpetual
Clear pricing rules: Each USDT-M Futures contract specifies the base asset's quantity delivered for a single contract, also known as "contract unit". For instance, BTCUSDT and ETHUSDT Futures contracts represent only one unit of its respective base asset, similar to spot markets.
Funding fee: USDT-M Futures contracts carry a funding fee. Funding payments are transferred between traders and are charged every eight hours. Please note that this time period may vary depending on market conditions.

USDT-M Futures vs Coin-M Futures

Type	USDT-M Futures	Coin-M Futures
Common Name	Linear Futures	Inverse Futures
Quote currency	Usually stablecoins such as USDT and USDC	Uusally Bitcoin or other cryptocurrencies
Notional value	In fiat	In crypto
Holding Time	Unlimited	Unlimited
Suitable users	Newcomers	Newcomers
Margin	USDT and other stablecoins	Multi-crypto (e.g., BTC and ETH)

1. Margin

USDT-margined perpetual futures use USDT as margin, whereas coin-margined perpetual futures use underlying cryptocurrency as the margin asset. Users must hold the corresponding underlying coin to participate in trading that specific contract. For example, for the BTC/USD coin-margined perpetual futures, users need to deposit BTC as margin.

Due to the difference in margin assets, the risk of margin depreciation varies between the two contract types when prices decline. For instance, when the price of the BTC/USD coin-margined perpetual futures falls, the required margin for the user’s position increases, meaning more BTC must be held as margin. In contrast, for USDT-margined perpetual futures, since the margin is USDT, a decline in BTC’s price does not affect the value of the USDT margin.

2. Quote currency

USDT-margined perpetual futures are quoted in USDT, while coin-margined perpetual futures are quoted in USD. As a result, the index prices for these two futures types differ. For example, the index price for BTC/USDT is derived from the BTC spot prices against USDT across various exchanges, whereas the index price for BTC/USD is based on BTC spot prices against USD from multiple exchanges.

3. Face Value

The contract value of each USDT-margined perpetual futures is denominated in the underlying cryptocurrency. For example, BTC/USDT has a face value of 0.001 BTC. In contrast, each coin-margined perpetual futures is denominated in USD; for instance, BTC/USD has a face value of 100 USD.

4. Profit and Loss Currency

For all USDT-margined perpetual futures, profits and losses are calculated in the quoted currency, USDT. For coin-margined perpetual futures, profits and losses are calculated in the underlying cryptocurrency. For example, if a user trades BTC/USD, the profit and loss are denominated in BTC.

Minimum order notional limit rule for USDT-M Futures contracts:

The minimum notional value of each order must be no less than the threshold of 5 USDT. If the order notional value is less than the set threshold (5 USDT), the order will be rejected.

For example, if the user opens an order of 0.001 BTC > 5 USDT notional value, the order can be successfully placed; if the user opens an order 0.0001 ETH < 5 USDT, the order can fail placed.

Notes:

VOOX Futures will adjust the minimum order threshold from time to time without prior announcement. You can check more details via Trading Rules.