USDT-margined (linear) futures
Also called: linear futures · USDT-M · USDT perpetual · stablecoin-margined futures
Definition
USDT-margined (linear) futures are futures contracts where margin, profit and loss are all in the stablecoin USDT, so results move in a straight line with the price.
How USDT-margined futures works
In a USDT-margined contract you post USDT as margin and every price move translates directly into USDT. A 1 USDT move on a 1 BTC position is a 1 USDT gain or loss. That simple, linear relationship is why these contracts are called linear and why most beginners start with them.
Because one margin currency covers many markets, you can trade BTC, ETH and hundreds of smaller coins from a single USDT balance. With cross margin, profits on one position can support another. Some exchanges also offer USDC-margined contracts that work the same way.
Your collateral does not fall with the coin, unlike inverse contracts, so a long position has only one source of risk. You still carry stablecoin risk: if USDT lost its peg, your margin would be worth less. Contract sizes, maximum leverage and fees differ by exchange and pair, so check the contract details.
Example
Suppose you short 2 ETH on a USDT-margined perpetual at 3,200 USDT with 1,280 USDT of margin, which is 5x leverage on a 6,400 USDT position. If ETH drops to 3,000, you earn 2 × 200 = 400 USDT. If ETH rises to 3,400, you lose 2 × 200 = 400 USDT, about 31% of your margin. The same 200 USDT move always means the same 400 USDT result, whatever the price level.
Common mistakes
- Assuming a stablecoin margin means the position itself is low risk.
- Letting one bad position drain the whole USDT balance in cross margin mode.
- Mixing up USDT-margined and coin-margined versions of the same contract.
Learn and practise
Try it on an exchange
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What is the difference between USDT-M and COIN-M futures?
USDT-M contracts use USDT for margin and profit, with linear payoffs. COIN-M contracts use the coin itself, so payoffs are non-linear and the collateral moves with the price.
Are USDT-margined futures better for beginners?
They are usually easier to understand because profit and loss are simple to calculate in a stable unit. The leverage risks are the same.