Depending on the“margin-denominated currency”used in contract trading, BiKi supports 2 default margin models of contracts, which support both forward and inverse contracts.
For easy understanding, under the existing product logic, USDT Contract is a “forward contract” and the Contract dominated by currency other than USDT is a “inverse contract”.
Appendix 2: Comparison of Perpetual Contracts on Mainstream Platforms
USDT Contract (recommended):
Which is, "forward contract". Take BTC / USDT as an example. The subject of the contract is BTC and the unit of pricing is USDT. The margin settlement unit used will be USDT. The unit of pricing is the same as the settlement currency.
Key Points:
1. BiKi is the 2nd mainstream platform to adopt USDT Standard as perpetual contract.
2. USDT Contract is recommended because with USDT as the settlement unit, you can open position in any contract without having to hold the currency. At the same time, USDT price is relatively stable for a long time, which can greatly reduce the risks caused by market fluctuation.
Inverse Contract:
Which is a contract dominated by currency other than USDT. Take BTC / USDT as an example. The subject of the contract is BTC and the unit of pricing is USDT but the margin settlement unit used will be BTC.
Key points:
1. If you choose to trade Inverse Contract e.g. BTC/USDT, you must have BTC as the holding asset in your account.
2. As the unit of pricing and the margin settlement unit is different for Inverse Contract e.g. BTC/USDT so if you make a sell short order and earn more BTC but if the BTC price drops significantly, you will risk a decline in your earnings.
Tips:
BiKi offers demo contract trading so you can simulate trading to experience the differences between the trading USDT Contract and Inverse Contract.
Notice：
Most mainstream platforms will provide default USDT Contract trading for more friendly risk-control.
Editor: BiKi Trading Academy
Update: Contract Trading Open Class Team