When you open the Binance futures page, you'll see two main categories: USDT-M Contracts and COIN-M Contracts. The core difference lies in what currency is used for margin and what currency profits and losses are settled in.
USDT-Margined Contracts: USDT as Collateral
USDT-margined contracts (also called USDT perpetual contracts) have straightforward rules:
- Margin is in USDT
- Profit and loss are settled in USDT
- Regardless of whether you're trading BTC, ETH, or any other coin, you only need USDT in your account
Example: You use 100 USDT as margin with 10x leverage to go long on BTC. BTC rises 5% — you earn 50 USDT. BTC falls 5% — you lose 50 USDT. The entire process only involves USDT, making calculations clear and simple.
Coin-Margined Contracts: Crypto as Collateral
Coin-margined contracts work differently:
- Margin is the actual coin you're trading (e.g., BTC contracts require BTC as margin)
- Profit and loss are settled in that same coin
- Contract face value is denominated in USD, but actual settlement is in crypto
Example: You use 0.01 BTC as margin with 10x leverage to go long on BTC. If BTC rises, you earn BTC. If BTC falls, you lose BTC.
The Hidden Difference in P&L Calculations
Coin-margined contracts have a subtle but important characteristic: your margin itself fluctuates in value.
When going long on a BTC coin-margined contract, if BTC rises, you earn more BTC and the BTC you hold is also appreciating — that's a double win. But if BTC falls, you lose BTC and the remaining BTC is also depreciating — a double loss.
USDT-margined contracts don't have this issue. USDT holds a stable value, so your P&L is simply a dollar amount.
Which Should Beginners Choose
Beginners should start with USDT-margined contracts. The reasons are compelling:
- P&L calculations are simple — USDT is "money," and everything is clear at a glance
- One type of collateral covers all trading pairs, no need to hold multiple coins
- More trading pairs are available with better liquidity
- Most tutorials and strategies use USDT-margined examples
Coin-margined contracts are better suited for users who already hold large amounts of a specific coin and want to hedge while continuing to hold.
To start practicing futures trading, sign up for Binance and select "USDT-M" on the futures page to enter USDT-margined mode.
Risk Warning: Regardless of contract type, leveraged trading carries the risk of liquidation and principal loss. Make sure you fully understand the rules before trading cautiously.