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 <img src="https://uploads.bydfi.in/events/cmsBYD.1735298444483.image.png" alt="BYD.1735298444483.image.png" data-href="https://uploads.bydfi.in/events/cmsBYD.1735298444483.image.png" style="width: 100%;">What is the COIN-M Perpetual Contract? What is the difference between Coin-M and USDT-M Perpetual Contracts?
 When placing an order using BTC as the margin, the transaction fee, funding fee, and settlement of the unrealized profits and losses are all settled in BTC. Taking BTCUSD as an example, the COIN-M Perpetual Contract is placed and settled with BTC, and the USDT-M Perpetual Contract is placed and settled with USDT.
 
 Where should the funds be placed when trading COIN-M Perpetual Contracts?
 You may start trading the COIN-M Perpetual Contract after transferring assets to the COIN-M account.
 Please refer to this article about how to transfer your assets: <a href="https://www.bydfi.com/server/en/support/FAQs/articles/c32m7u7vpqgd" target="_blank">How to Transfer Assets?</a>
 
 Is it possible to switch between cross and isolated mode in real time? 
 BYDFi supports switching between cross and isolated mode when there are no open positions; when there are open positions or trigger orders, switching between cross and isolated mode is not supported.
 
 What is the risk limit?
 BYDFi implements a tiered margin system, with different levels based on the value of user positions. The larger the position, the higher the initial margin rate when opening a position. The larger the value of the contract held by the trader, the lower the maximum leverage that can be used. Each contract has a specific maintenance margin rate, and margin requirements increase or decrease as risk limits change.
 
 Can the unrealized profit be used to open positions or make withdrawals?
 No, unrealized profit can only be settled after closing the position. Unrealized profit does not increase the available balance, so it cannot be used to open a position or make withdrawals.
 
 Is the insurance pool for COIN-M Perpetual Contracts shared or currency-independent?
 COIN-M perpetual contracts are settled using the cryptocurrency. As a result, the insurance pools are separate due to the difference in currency.
 
 What is an Inverse Contract?
 The Inverse Contract is also known as the COIN-M Contract. Traders need to first confirm how much USD to trade and then use the underlying currency (e.g., BTC, ETH) to calculate margin, profit, and loss. If a trader wants to trade Bitcoin contracts, they must use Bitcoin as the underlying currency, and if they are trading Ether contracts, then they need to hold Ether.
 
 Can I trade ETH on BYDFi if I have BTC?
 No, traders need to have ETH to trade the ETHUSD COIN-M Perpetual Contract.
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COIN-M Perpetual Contracts FAQ

COIN-M Perpetual Contracts FAQ｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cms1736162425293xuEvZoakMrqC.png" alt="image.png" data-href="" style="width: 100%;"/>Isolated ModeWhen the position margin ratio reaches 100%, the position will be triggered liquidation with a liquidation transaction fee and a liquidation clearance fee. Please note that the position is triggered by the margin ratio, liquidation price is for reference only. Cross ModeWhen the position margin ratio reaches 100%, the position will be triggered liquidation with a liquidation transaction fee and a liquidation clearance fee. Please note that the position is triggered by the margin ratio, liquidation price is for reference only. In addition, all the cross mode positions share the same margin, so as long as one cross mode position triggers liquidation, all the cross mode positions will be closed regardless of whether they are profitable or not. The specific liquidation process is as follows:<ul><li>Cross Mode: Cancel all pending orders (including all pending orders in Isolated Mode)</li><li>Isolated Mode: Cancel all pending orders including TP/SL orders for the specified trading pair (other trading pairs are not affected)</li><li>If the margin maintenance requirement is not met at this point, the position will be taken over by the liquidation engine at the bankruptcy price.</li></ul>When the liquidation is executed at the bankruptcy price, the following scenario occurs:<ul><li>If the position can be executed in the market at a price better than the bankruptcy price, the liquidation clearance fee will be added to the insurance fund.</li><li>If the position cannot be executed at a price better than the bankruptcy price, the breakout loss will be covered by the insurance fund.</li></ul>Example: FIBO holds a 1.5 million BTCUSD long position + 1 million BTCUSD long limit order.When the position margin ratio ≥100%, the system will first cancel the 1 million BTCUSD limit order. This releases a portion of the margin to increase the available balance in an attempt to meet the maintenance margin requirement. If the position is still not margined to the maintenance margin requirement after the limit order is canceled, the liquidation engine will take over the position. Note:<ul><li>Margin Ratio = (Maintenance Margin+ Liquidation Transaction Fee) / Margin Balance</li><li>Liquidation Clearance Fee≈ Position Maintenance Margin = Actual Position Margin + Liquidation PNL - Liquidation Transaction Fee</li><li>Liquidation Transaction Fee = Position Value * Quantity / Mark Price * Liquidation Transaction Fee Rate</li></ul> Risk Control PolicyWhen the margin balance is insufficient, we will send a margin call and a liquidation notice to the user by email. This feature serves as a risk alert that cannot be guaranteed to be sent or delivered in a timely manner. Under certain circumstances (including due to network congestion and poor network conditions), you may be unable or delayed in receiving email alerts during your use of the service, and BYDFi reserves the right to send notifications without obligation. To prevent excessive market risk concentration and manipulation, BYDFi limits individual users' position size. Orders exceeding these limits will be rejected. Additionally, we strictly prohibit users from circumventing position limits through any means, such as multiple accounts, identity masking, third-party account control, or exploiting system vulnerabilities, to maintain market fairness.

The Process of Forced Liquidation (COIN-M)

COIN-M Forced Liquidation Process｜BYDFi Help Center

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 <img src="https://uploads.bydfi.in/events/cms1736162475497DZIp1vfAH1lG.png" alt="image.png" data-href="" style="width: 100%;">When the margin ratio of a position reaches 100%, forced liquidation is triggered, resulting in the loss of all margin allocated to that position. 
 <h3>Margin Rate Calculation Formula</h3>
 Isolated Margin Rate
 
 (Contract Quantity * Par Value / Entry Price * Maintenance Margin Rate - MMQC + Contract Quantity * Par Value / Mark Price * Liquidation Fee Rate) / (Margin + Unrealized PNL) * 100%
 
 Example:
 FIBO holds a 100X leveraged BTCUSD long position with a contract quantity of 1,000, an entry price of 25,000 USDT, a par value of 1 USDT, a maintenance margin rate of 0.5%, a mark price of 24,500 USDT, a liquidation fee rate of 0.006, an unrealized PNL of -0.9995551 BTC, and a position margin of 1BTC, and MMQC is 0.
 
 (1,000 * 1 / 25,000 * 0.005 + 1,000 * 1 / 24,500 * 0.006) / ( 1 - 0.9995551) = 100% 
 
 Cross Margin Rate
 
 (|Long Position Maintenance Margin - Short Position Maintenance Margin| + Par Value * Contract Quantity / Mark Price * Close Fee Rate) / (Account Balance + Cross Margin Unrealized PNL) * 100%
 
 Example:
 FIBO holds a BTCUSD cross margin long position with a contract quantity of 1,000, a par value of 1 USDT, a mark price of 25,000 USDT, a maintenance margin of 0.05 BTC for long positions, 0 BTC for short positions, a liquidation fee rate of 0.006, an account balance of 1 BTC, and an unrealized PNL of -0.95 BTC.
 
 (|0.05 - 0| + 1 * 1,000 / 25,000 * 0.006) / (1 -0.95) * 100% = 100%
 
 <h3>Liquidation Price Calculation Formula</h3>
 
 Isolated Margin
 Long Position:
 [Par Value * Contract Quantity * (Liquidation Fee Rate + 1)] / [Margin + Par Value * Contract Quantity * (1 - Maintenance Margin Rate) / Entry Price + MMQC]
 Short Position:
 [Par Value * Contract Quantity * (Liquidation Fee Rate - 1)] / [Margin - Par Value * Contract Quantity * (1 + Maintenance Margin Rate) / Entry Price + MMQC]
 
 Cross Margin
 (Par Value * Long Contract Quantity - Par Value * Short Contract Qunatity + Par Value * Contract Quantity * Maintenance Margin Rate + Par Value * Contract Quantity * Liquidation Fee Rate) / (Wallet Balance +MMQC - Par Value * Short Contract Quantity / Short Entry Price + Par Value * Long Contract Quantity / Long Entry Price) ​ 
 Note:
 <ul>
 <li>Wallet Balance = Transfer In - Transfer Out + Realized PNL</li>
 <li>Maintenance Margin = Position Value * Maintenance Margin Rate - MMQC</li>
 <li>Isolated Margin Position Value = Contract Quantity * Par Value / Entry Price</li>
 <li>Cross Margin Position Value = Contract Quantity * Par Value / Mark Price</li>
 <li>Contract Quantity (Coin) = Contract Quantity (Cont) * Par Value</li>
 <li>MMQC please refer to this <a href="https://www.bydfi.com/en/swap-info?page=5&amp;type=usdt" target="">page</a></li>
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Liquidation Price Calculation (COIN-M)

COIN-M Liquidation Price Calculation｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cmsBYD.1735301417084.image.png" alt="BYD.1735301417084.image.png" data-href="https://uploads.bydfi.in/events/cmsBYD.1735301417084.image.png" style="width: 100%;"/>In the cryptocurrency market, prices are highly volatile and investors and traders are often exposed to significant price risk. In order to manage these risks, many investors choose to hedge their positions using currency-based sustainable contracts. What is Hedging?While buying/selling, you can sell/buy the same amount but in the opposite direction of contracts at BYDFi as a way to protect against risk and offset losses due to price movements. In times of market instability, you can ensure the value of your crypto currency holdings. Here is an example of how you can hedge through a COIN-M Perpetual Contract on BYDFi: FIBO purchases and holds one ETH at the price of 3,000 and purchases the following specification contracts through BYDFi. Product: ETHUSD COIN-M Perpetual Contract Specification: 1X Leverage/Short If the price of ETH remains at 3,000 There is no profit or loss on positions. If the price of ETH drops to 1,500 There is an opening position of 1 ETH. When the user closes the position, he will have the original 1 ETH + 1 ETH position profit = 2 ETH. Even if the market price drops by half, the total value of the position remains the same. If the price of ETH rises to 6,000 There is an opening position of 0.5 ETH. When the user closes the position, he will have the original 1 ETH - 0.5 ETH position loss = 0.5 ETH. 0.5 ETH = $3,000, so the total value of the holdings remains the same. If the user only holds 1 ETH, he will face a higher risk if the market rises or falls as mentioned above. However, through this method of operation, users can still achieve a hedge even if the market is unstable. Note: The above calculation of profit and loss does not include transaction fees. Advantages and Risks of Hedging Advantages:<ul><li>Risk reduction: By hedging, you can protect your spot position from losses during price fluctuations.</li><li>Flexibility: Currency-based perpetual contracts allow you to open and close positions at any time, providing you with the flexibility to respond to market movements.</li><li>Long-term use: Since the perpetual contract has no expiration date, you can hold the hedged position for a long time.</li></ul>Risk:<ul><li>Transaction costs: Handling fees will be incurred for each trade and may be higher especially if positions are adjusted frequently.</li><li>Funding Costs: A perpetual contract involves a funding rate, which is a cost for the duration of the position and may increase when market funding rates are unfavorable to you.</li><li>Leverage Risk: Hedging with leverage can be more capital efficient, but it can also increase risk, especially during times of high market volatility.</li></ul>Hedging with currency-based perpetual contracts is an effective risk management strategy to protect your assets in the event of high volatility in the cryptocurrency market. By properly calculating the contract size, opening short positions, monitoring market movements, and adjusting positions at any time, you can minimize your risk and invest securely during market volatility.

How to Hedge with COIN-M Perpetual Contracts

Hedging with COIN-M Perpetual Contracts｜BYDFi Help Center

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 <img src="https://uploads.bydfi.in/events/cmsBYD.1735300655567.image.png" alt="BYD.1735300655567.image.png" data-href="https://uploads.bydfi.in/events/cmsBYD.1735300655567.image.png" style="width: 100%;">Regardless of any trades, it is important to understand how P&amp;L is calculated before entering one.We will introduce them one by one in order so that traders can understand exactly how the following variables affect the calculation of profit and loss.
 
 Average Entry Price (AEP) of Position
 In BYDFi's COIN-M trading (BTCUSD, ETHUSD, DOTUSD, and XRPUSD), whenever traders add on to their position, the average entry price will change.
 
 Example: FIBO now holds a long position of 1,000 BTCUSD with the opening price of 5,000 USD. An hour later, FIBO decides to open an additional position of 2,000 with an opening price of 6,000 USD.
 
 Average Entry Price = Contract Quantity / Total Contract Value in BTC Contract Quantity = 1,000 + 2,000 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;= 3,000
 
 Total Contract Value in BTC = (1,000 / 5,000) + (2,000 / 6,000) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;= 0.53333334 BTC
 
 Average Entry Price = 3,000 / 0.53333334 BTC &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 　 　 = 5,625 USD
 
 Contract Value (Position) = Contract Quantity * Contract Multiplier / Average Entry Price
 
 Unrealized Profit and Loss (P&amp;L)
 Once the order is filled, the position and its unrealized profit and loss can be instantly seen in the position area.
 
 The formula for calculating unrealized profit and loss will be different according to the direction of your trade. Long Positions Example: FIBO holds a long position of 1,000 BTCUSD with an entry price of 5,000 USD. When the current mark price in the position table is displayed as 5,500 USD, the unrealized profit and loss will be displayed as 0.01819 BTC.
 
 Unrealized Profit and Loss = Contract Quantity * [(1/ Average Entry Price) - (1 / Current Mark Price)]
 = 1,000 * [(1 / 5,000) - (1/ 5,500)] = 1,000 * 0.00001819 BTC = 0.01819 BTC
 
 Short Positions Example: FIBO holds a short position of 1,000 BTCUSD with an entry price of 5,000 USD. When the current mark price in the order table is displayed as 4,500 USD, the unrealized profit and loss will be displayed as 0.02223 BTC.
 
 Unrealized Profit and Loss = Contract Quantity * [(1 / Current Mark Price) - (1/ Average Entry Price)]
 = 1,000 * [(1 / 4,500) - (1 / 5,000)] = 1,000 * 0.00002223 BTC = 0.02223 BTC
 
 Notice:
 <ul>
 <li>In COIN-M Perpetual Contracts, your profit and loss are settled in the underlying assets, not in USD. The US dollar (USD) here is mainly used as a quotation mechanism, just for traders' reference.</li>
 <li>It refers to the fluctuation in the price (such as 500 USD), and it does not necessarily mean that you have won or lost 500 USD.</li>
 <li>When the leverage is increased, it will not directly affect your profit or loss. On the contrary, profit and loss are determined by position size and price fluctuations. In simple terms: The higher the leverage, the lower the margin collateral needed to open your position. The larger the contract quantity, the bigger the profit or loss. The greater the distance between the price and the entry price, the greater the profit or loss.</li>
 <li>The default unrealized P&amp;L is shown based on the Last Mark Price. Place the mouse on the displayed number and the unrealized P&amp;L will be displayed at the mark price.</li>
 <li>Lastly, it is important to note that the calculation of unrealized P&amp;L does not include any transaction fees or funding fees paid or received by the trader in the course of opening, closing, or holding a position.</li>
 </ul>
 
 Percentage of Unrealized P&amp;L (%)
 Unrealized P&amp;L % basically shows the return on investment (ROI) of this position in percentage form. &nbsp;Just like unrealized profit and loss, this figure is constantly changing with the latest market price. Therefore, the formula for the percentage of unrealized profit and loss is as follows:
 
 Percentage of Unrealized P&amp;L (%) = [Unrealized Profit and Loss / Initial Margin] * 100% Initial Margin = (Position Value * Initial Margin Rate) + Transaction Fee Notice:
 <ul>
 <li>There is a misconception among some traders that increasing your leverage will not increase your unrealized profit. An increase in the P&amp;L% is actually due to the decrease in the margin used for the position, not an increase in the actual profit.</li>
 </ul>
 Closed P&amp;L 
 When the trader finally closes the position, the profit and loss are finally realized, and the record can be found in the trade history.
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 <td colspan="1" rowspan="1" width="auto"> </td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">Calculation of Unrealized P&amp;L </td>
 <td colspan="1" rowspan="1" width="auto">Calculation of Closed P&amp;L</td>
 </tr>
 <tr>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">Position Profit and Loss (P&amp;L)</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">YES</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">YES</td>
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 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">Trading Fee(s)</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">NO</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">YES</td>
 </tr>
 <tr>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">Funding Fee(s)</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">NO</td>
 <td colspan="1" rowspan="1" width="auto" style="text-align: center;">YES</td>
 </tr>
 </tbody>
 </table>
 Closed P&amp;L = Position P&amp;L - Opening Fee - Closing Fee - Total Funding Fee Paid/Received
 
 FIBO holds a short position of 1,000 BTCUSD with an entry price of 5,000 USD. When the latest market price is displayed as 4,500 USD, FIBO decides to close the entire position through the market price. Assume that FIBO also opened the position through a market order and paid a total of 0.00005 BTC as funding fees during the position period.
 
 Based on our previous calculation: Position P&amp;L = 0.02223 BTC (Profit) Opening Fee = (1000 / 5000) x 0.06% = &nbsp;0.00012 BTC Closing Fee &nbsp; = (1000 / 4500) x 0.06% = &nbsp;0.00013 BTC Total Funding Charges Paid / Received = 0.00005 BTC (Paid) Closed P&amp;L = 0.02223 - 0.00012 - 0.00013 - 0.00005 = 0.02193 BTC
 
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P&L Calculations (COIN-M)

P&L Calculation (COIN-M)｜BYDFi Help Center

<img src="https://uploads.bydfi.in/events/cms1736162439778D1dlJo1VcnDA.png" alt="image.png" data-href="" style="width: 100%;"/>Initial MarginInitial margin refers to the minimum collateral amount required to open a position in leveraged trading. The leverage used by traders is inversely proportional to the initial margin required to hold a position. The higher the leverage, the less initial margin is required. In the COIN-M Perpetual Contract, the initial margin is obtained by multiplying the order value by the initial margin rate. The initial margin rate depends on the leverage used. Initial Margin = Contract Quantity / Entry Price / Leverage Example:FIBO opened a long order of 500 BTCUSD contracts at 40,000 USD with 50X leverage.Initial Margin = 500 / 40,000 / 50 = 0.00025 BTC Maintenance MarginThe maintenance margin is the minimum amount of margin a trader needs to keep a position open. The maintenance margin will increase or decrease based on the risk limit chosen by the trader. By default, the risk limit for all trading pairs will start from the lowest maintenance margin in their respective <a href="https://www.bydfi.com/en/swap-info?page=5&type=usdt" target="_blank">risk limit tables</a>. When the margin level used for a position is lower than the maintenance margin level, the position will be liquidated. Position Value = Contract Quantity * Entry PriceMaintenance Margin = Maintenance Margin Rate * Position Value - <a href="https://www.bydfi.com/en/swap-info?page=5&type=usdt" target="_blank">MMQC</a>The required Maintenance Margin Rate (MMR) for a position is based on the margin level requirement for the value of the position. Example:FIBO opened a long position of 500 BTCUSD contracts at 40,000 USD with 50X leverage in isolated mode.Initial Margin = 500 / 40,000 / 50 = 0.00025 BTCMaintenance Margin = 0.005 * 0.00025 = 0.00000125 BTC This means that the position's maximum loss is 0.00024875 BTC (0.00025 BTC - 0.00000125 BTC); otherwise, it will be forced to liquidate.

Initial Margin and Maintenance Margin (COIN-M)

Initial & Maintenance Margin (COIN-M)｜BYDFi Help Center