Cryptocurrency derivatives trading has become a cornerstone of modern digital asset investment, offering traders powerful tools to capitalize on market movements. Among the most popular platforms, Bitget supports multiple contract types—primarily U-Margin (USDT-margined) perpetual contracts, coin-margined perpetual contracts, and coin-margined delivery contracts. Each serves distinct trading strategies and risk profiles. This guide breaks down these contract types in clear, actionable terms, helping both beginners and experienced traders make informed decisions.
What Are U-Margin Perpetual Contracts?
U-Margin perpetual contracts use stablecoins—typically USDT or USDC—as the base for margin, profit, and loss calculations. These contracts have no expiration date, making them ideal for flexible, short-to-medium-term trading. Common trading pairs include BTCUSDT, ETHUSDC, and other stablecoin-denominated assets.
For example:
- You open a long position on BTCUSDT at $60,000 with 10x leverage.
- Your profit or loss is directly calculated in USDT, simplifying tracking and settlement.
✅ Advantages
- Beginner-friendly: No need to convert profits into fiat or other cryptocurrencies.
- Predictable value: Since gains and losses are in stablecoin, they reflect real-time USD-equivalent changes.
- Simplified risk management: Easier to calculate exposure and set stop-loss levels.
❌ Drawbacks
- Missed crypto appreciation: Profits are locked in USDT, so you don’t benefit from potential long-term appreciation of the underlying coin (e.g., holding BTC instead of cashing out in USDT).
- Stablecoin dependency: Exposure to systemic risks associated with stablecoins, though minimal with major ones like USDT or USDC.
🎯 Ideal For:
New traders, short-term speculators, or anyone seeking straightforward P&L tracking without crypto volatility on settlement.
👉 Discover how to start trading U-margined contracts with confidence today.
Coin-Margined Contracts: Perpetual vs. Delivery
Unlike U-Margin contracts, coin-margined contracts use the underlying cryptocurrency itself (like BTC or ETH) as the margin and settlement asset. This category includes two subtypes: perpetual and delivery (futures) contracts.
🔁 Coin-Margined Perpetual Contracts
These have no expiry date and are settled in the base cryptocurrency. A typical example is BTCUSD, where:
- The contract value is quoted in USD but settled in BTC.
- Funding rates apply periodically to keep the contract price aligned with the spot market.
Example:
You short 1 BTCUSD at $60,000 using 0.2 BTC as margin (5x leverage). If BTC drops to $50,000:
- Your profit is paid in BTC—approximately 0.2 BTC.
- This helps hedge against your existing BTC holdings losing fiat value.
📆 Coin-Margined Delivery Contracts
These contracts have a fixed expiration date (e.g., BTCUSD0627 or ETH0927). At expiry, positions are automatically settled based on the final index price. Traders must pay a settlement fee, and all P&L is denominated in the base coin.
Use Case:
Arbitrageurs often exploit price differences between spot and futures markets. If BTC’s spot price is $60,000 but a near-term futures contract trades at $59,000, buying the undervalued futures contract can yield risk-free profit at expiry.
✅ Advantages
- Hedging power: Perfect for long-term holders who want to protect their portfolio from downside moves without selling actual holdings.
- Crypto-native returns: Gains are received in crypto, allowing compounding within the ecosystem.
- Advanced strategy support: Enables arbitrage, yield generation, and complex derivatives plays.
❌ Drawbacks
- Complexity: Requires understanding of price conversion (e.g., calculating BTC gains from USD-denominated moves).
- Higher learning curve: Not ideal for beginners due to margining in volatile assets.
🎯 Ideal For:
Professional traders, institutional investors, and crypto purists managing large spot positions.
Key Differences Between U-Margin and Coin-Margin Contracts
| Feature | U-Margin Perpetual | Coin-Margin Perpetual | Coin-Margin Delivery |
|---|---|---|---|
| Margin Asset | USDT / USDC | BTC / ETH | BTC / ETH |
| Settlement Currency | USDT / USDC | BTC / ETH | BTC / ETH |
| Expiry | None | None | Fixed date |
| Funding/fees | Funding rate | Funding rate | Settlement fee |
| P&L Calculation | Direct in stablecoin | In base coin (requires conversion) | In base coin (requires conversion) |
| Best For | Short-term trading, beginners | Hedging, long-term strategies | Arbitrage, expiry-based plays |
💡 Pro Tip: Choose U-Margin for simplicity and stable outcomes; opt for coin-margin when you're already holding crypto and want to hedge or compound gains.
Real-World Use Case Scenarios
Understanding theory is one thing—applying it is another. Let’s explore practical scenarios that highlight which contract type fits best.
Scenario 1: Short-Term Speculation (U-Margin Perpetual)
You believe Bitcoin will rise from $60,000 to $61,000 in the next few hours.
- Trade: Go long on BTCUSDT with 10x leverage
- Margin: 6,000 USDT for 1 BTC exposure
Outcome:
- Price hits $61,000 → Profit = 1,000 USDT
- Price drops to $59,000 → Loss = 1,000 USDT
✅ Clear, immediate results in stablecoin
🎯 Best for day traders and new users
👉 Learn how to execute high-probability short-term trades with precision.
Scenario 2: Hedging Long-Term Holdings (Coin-Margin Perpetual)
You own 1 BTC bought at $60,000 but fear a market correction.
- Action: Open a short position on BTCUSD using 0.2 BTC as margin (5x)
If BTC falls to $50,000:
- Spot loss: –$10,000
- Futures gain: +0.2 BTC (~$10,000 value)
- Net effect: Your overall BTC value remains relatively stable
✅ Protects wealth during volatility
🎯 Ideal for HODLers and institutions
Scenario 3: Expiry Arbitrage (Coin-Margin Delivery)
The BTCUSD June 27 futures contract trades at $59,000 while spot BTC is $60,000—a $1,000 gap.
- Strategy: Buy the futures contract now and hold until expiry
At expiry:
- Futures price converges to spot → $60,000
- Profit = $1,000 per BTC
- Received in BTC: ~0.0169 BTC ($1,000 / $59,000)
✅ Risk-free profit if executed correctly
🎯 Suited for algorithmic traders and arbitrage specialists
Frequently Asked Questions (FAQ)
Q1: Which contract type is better for beginners?
A: U-Margin perpetual contracts are best for newcomers due to their simple P&L structure and stablecoin settlement.
Q2: Can I lose more than my initial investment?
A: On regulated platforms like Bitget with insurance funds and auto-deleveraging systems, losses are typically capped at your margin balance under normal conditions.
Q3: Do I have to pay fees when holding a position overnight?
A: Yes—perpetual contracts charge or credit a funding fee every 8 hours to align futures prices with spot. It depends on market direction.
Q4: What happens when a delivery contract expires?
A: All open positions are settled automatically using the final index price. You receive or pay the difference in the base cryptocurrency.
Q5: Is hedging with coin-margined contracts effective?
A: Absolutely. By shorting a coin-margined contract while holding spot BTC or ETH, you neutralize downside risk without selling your assets.
Q6: Can I switch between U-Margin and coin-margined contracts?
A: Yes—most platforms allow both types simultaneously. Just ensure proper risk allocation across accounts.
Final Thoughts: Choosing the Right Contract
Your choice between U-Margin and coin-margined contracts should align with your trading goals, risk tolerance, and crypto ownership status.
- Start with U-Margin perpetuals if you’re new or prefer clean, stablecoin-based outcomes.
- Use coin-margined perpetuals to hedge existing holdings or compound crypto-denominated returns.
- Explore delivery contracts for advanced strategies like arbitrage or yield enhancement.
Market conditions matter too. During high volatility, U-Margin offers predictability. In sideways or bearish markets, coin-margined shorts can protect wealth.
👉 Take control of your crypto trading journey—start applying these insights now.