Phemex provides a linear perpetual contract denominated in USDT, offering traders the opportunity to take long or short positions using USDT as a margin without any expiration date.
Phemex USDT Perpetual Contracts are settled in USDT, with all margin requirements, profit, and loss calculations conducted in USDT. For instance, considering the BTCUSDT pair, if a trader holds a 1 BTC contract and the BTC price rises by $100, the trader's profit will amount to 100 USDT(fee is not included).
USDT Perpetual Contract Specifications:
The difference between the USDT Perpetual Contract and the Inverse Perpetual Contract
A Linear Perpetual Contract settled in USDT is different from an Inverse Perpetual Contract in the calculation of margin, Profit and Loss (PnL), and risk exposure.
Margin and PnL Calculation
Margin and PnL calculations for USDT Perpetual Contracts are more straightforward than Inverse Perpetual Contracts. The Linear Perpetual Contract uses USDT as quoted currency and also collateral, producing a payoff in USDT. The Inverse Perpetual Contract uses BTC or other coins as collateral, producing a payoff in BTC or other corresponding coins.
Risk Exposure
Inverse Perpetual Contracts are traded and settled in the underlying asset. Traders are naturally exposed to the market risk of the collateral itself, even if they don’t hold any positions.
On the other hand, USDT Perpetual Contracts are settled in USDT. You don’t have to worry about the market risk of collaterals such as BTC. However, stablecoins may not be 100% stable and USDT is not entirely risk-free. Please manage your trading risks.
