A USDⓈ-margined contract is a USDT-based cryptocurrency contract.
USDT is a stablecoin whose value is pegged to the U.S. dollar and is commonly used as a store of value and stable assets in the cryptocurrency trading market. USDⓈ-margined contracts are derivative contracts whose price depends on the price of the underlying asset (such as BTC or ETH) and are denominated in USDT.
Similar to futures contracts in traditional financial markets, USDⓈ-margined contracts offer an advanced trading tool that allows traders to increase their investment positions by using leveraged trading as a way to increase profit opportunities. At the same time, the USDⓈ-margined contract market also offers arbitrage opportunities, allowing traders to take advantage of price differences to buy and sell between different trading platforms or markets to earn a spread.
The USDⓈ-margined contract market has a high level of risk and price volatility, and traders need to make careful decisions and use effective risk management strategies. Stop-loss and take-profit are common risk management strategies that can be used to protect investors from large losses by automatically executing trades when prices fall or rise to a certain level.
In addition, the USDⓈ-margined contract market is risky because it is decentralized, has no central regulator, and lacks regulation by laws and regulations. Traders need to be aware of the regulatory situation in the market and changes in laws and regulations in order to protect their investments and transactions.
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Example:
Suppose a trader believes that the price of BTC will rise and invests using USDⓈ-margined contracts. The trader chooses a contract based on the BTC price in the USDⓈ-margined contract market, sets a certain leverage multiple and decides to invest 1000 USDT to buy a position in the contract.
If the price of BTC rises, the trader will make a profit. If the price of BTC rises by 10%, the trader's contract value will increase by 10% to 1100 USDT. If the trader uses 5x leverage, his actual gain will be 50% (1100 - 1000)/ 1000.
However, if the BTC price drops, the trader will lose money. If the BTC price drops by 10%, the trader's contract value will decrease by 10% to 900 USDT. If the trader uses 5x leverage, his actual loss will be 50% (1000 - 900)/ 1000.