The U standard contract (USDT-margined Contracts) is a contract transaction of *stablecoin USDT (Teda) . Unlike other contracts with the underlying assets (such as Bitcoin, Ethereum, etc.) as the valuation unit, the U standard contract settles the trading margin and profit in the USDT. A U-standard contract is a type of contract trading that is widely used in cryptocurrency exchanges, suitable for investors who want to trade in stablecoins as denominated units.
1. Basic characteristics of the U-standard contract
- USDT as the unit: all margin, profit and loss settlement, leverage operation, etc. are taken in USDT to avoid the impact of assets with large market price fluctuations on margin. For example, when using U-standard contracts, investors dont have to worry about margin changes caused by the price fluctuations of bitcoin, and all fees and profits and losses are calculated through USDT.
- Suitable for stablecoin trading: Since USDT is a stablecoin, its value is usually linked to the dollar and is less volatile, the U standard contract is more suitable for investors who want to avoid the impact of other cryptocurrencies.
- Not directly affected by the fluctuations of the underlying asset: unlike the traditional currency standard contract, the profit and loss calculation of the U standard contract is not directly affected by the price fluctuations of the underlying asset (such as Bitcoin, Ethereum, etc.). Even if market prices are volatile, investors capital and profit calculations will not be affected as long as the USDT remains stable.
2. Advantages of the U-standard contract
- Stable settlement currency: The USDT is usually stable in value, largely tied to the dollar, so it provides investors as a hedge against market volatility. Especially for those investors who do not want to be exposed to the high volatility risk of cryptocurrencies, U-based contracts can provide a relatively stable trading experience.
- Simplify fund management: Because all transactions are settled with the USDT, investors do not need to handle frequent asset exchange and transfer operations, simplifying the fund management process. This is very helpful for cross-currency transactions and complex capital flows.
- Contract trading flexibility: U standard contracts usually support different leverage multiple, stop loss and stop profit setting, long and short, and other functions, providing a flexible investment strategy, allowing investors to flexibly adjust them according to market conditions.
- Capital is not affected by market fluctuations: the margin of the U standard contract is USDT, so investors funds are not vulnerable to market fluctuations, which avoids the capital fluctuations caused by the sharp fluctuations of the underlying asset price in the currency standard contract.
3. Trading mode of the U-standard contract
- Long Long (Long): When investors expect market prices to rise, they can open a long position and choose to buy a U standard contract. If the market rises as expected, investors sell contracts to close their positions and earn a profit from the USDT settlement.
- Short selling (Short): When investors expect market prices to fall, they can open a short position and choose to sell the U standard contract. If the market falls as expected, investors will make profits from the USDT settlement.
- Leveraged trading: U-standard contracts usually support leveraged trading, and investors can use leverage to scale up trading for higher potential returns. Leverage ratios are usually between 1x and 125x, and investors can choose a leverage multiple according to their risk tolerance.
- Stop loss and stop profit: Investors can set stop loss and stop profit points to manage risk and lock in profits with automated trading. The system will automatically unwind positions when the market reaches a set price, helping investors avoid excessive losses or lock in profits.
4. The difference between U standard contract and currency standard contract
| characteristic | U standard contract | Currency standard contract |
| Pricing currency | USDT (stablecoin) | Subject assets (such as BTC, ETH, etc.) |
| currency of settlement | USDT (stablecoin) | Subject assets (such as BTC, ETH, etc.) |
| Deposit valuation | Margin and profits are calculated in the USDT | Margin and profits are calculated as the underlying assets |
| Fluctuative risk | Less fluctuation, more stable | It is greatly affected by the fluctuation of the underlying asset price |
| suitable object | Suitable for investors who want to measure in stablecoins | Suitable for investors with long-term holdings of the underlying assets |
| risk management | Eer to manage and lower risk | The risk is high, affected by the fluctuation of the underlying asset price |
5. Example of U standard contract
Assuming the current USDT against BTC is 20,000 USDT (i. e. 1 BTC = 20,000 USDT), you want to open a 1 BTC long position with 10 times leverage.
- Open the position: you use the 2000 USDT margin to open a BTC long contract with 10 times leverage. With leverage, you control BTC contracts worth 20,000 USDT.
- Market volatility: Assuming the BTC price rises to 21,000 USDT, you earn a profit of 1,000 USDT when you close your position.
- Settlement: All profits and losses will be settled by the USDT, and your account balance will be increased by 1,000 by the USDT.
- Risk: If the market price falls to 19,000 USDT, your losses will increase accordingly, which may eventually lead to insufficient margin to trigger forced unwinding.
6. Summary
The U-standard contract is a contract trading method with the USDT as a valuation unit and settlement currency, which is suitable for investors who want to avoid the volatility of other cryptocurrencies. It provides traders with flexible trading strategies, such as long, short, leveraged trading, stop loss and stop profit, etc., while reducing the direct impact of market volatility on investors funds by using the stable currency USDT as the margin and settlement currency. Due to the stability of the USDT, U-standard contracts have become the preferred option for many investors when trading cryptocurrency contracts.