Updated: April 19, 2026 · About 10 minutes to read
Binance futures come in two flavors: USDⓈ-M Futures settled in stablecoins, and Coin-Margined Futures (COIN-M) settled in BTC, ETH, BNB and other base coins. For long-term holders, COIN-M is the main tool for amplifying coin-denominated returns, hedging spot exposure, and running basis arbitrage. This 2000+ word guide walks you through how COIN-M works, the exact math, the liquidation logic, three real trading cases, and a beginner pitfalls checklist.
Coin-Margined Futures (COIN-M) is the derivatives family Binance launched in August 2020. Its defining trait is that the crypto asset itself is both the margin and the settlement currency. For example:
This contrasts sharply with USDⓈ-M futures, which always use USDT or USDC as margin regardless of the pair traded. COIN-M is essentially "earning coins with coins", which maps naturally onto how long-term holders think about their stack.
| Dimension | USDⓈ-M | COIN-M |
|---|---|---|
| Margin asset | USDT, USDC, BFUSD and other stablecoins | BTC, ETH, BNB and other base coins |
| Settlement asset | Stablecoin | The underlying base coin |
| Contract face value | Linear (quantity × price) | Inverse (fixed USD notional per contract) |
| PnL curve | Linear | Inverse (non-linear) |
| Best for | USD-denominated, risk-controlled trading | Long-term holders, miners, hedge funds |
The key subtlety is that inverse contracts have a non-linear PnL curve: when BTC rallies, a BTC-denominated long actually earns fewer BTC per dollar moved (because each contract is worth less BTC as the price rises), but the BTC you already hold has appreciated, so your total value in USD still rises. Confusing this point is the number-one mistake beginners make.
COIN-M trades in "contracts":
So "100 BTCUSD Perpetual contracts" = 10,000 USD of notional exposure.
Required margin (coin) = contracts × contract size / entry price / leverage
Example: 100 BTCUSD Perpetual longs, entry 60,000, 10x leverage → required margin = 100 × 100 / 60000 / 10 = 0.0167 BTC.
PnL (coin) = contracts × contract size × (1/entry − 1/exit) (long)
PnL (coin) = contracts × contract size × (1/exit − 1/entry) (short)
Example: 100 BTCUSD longs opened at 60,000, closed at 62,000 → profit = 100 × 100 × (1/60000 − 1/62000) ≈ 0.00538 BTC (≈ 333 USD).
| User type | Recommended leverage | Recommended mode |
|---|---|---|
| Beginner | 1–3x | Isolated |
| Spot holder + hedge | 1–2x | Isolated (dedicated hedge account) |
| Trend trader | 3–10x | Isolated |
| Arb / market making | 5–20x | Cross |
| Full-send (not recommended) | 50–125x | Case by case |
COIN-M uses an inverse liquidation-price formula, which differs slightly from USDⓈ-M. Core elements:
For a COIN-M long, a price drop hits you twice: the position loses, and your BTC collateral also depreciates. So COIN-M blows up faster than USDⓈ-M on the same adverse move. This is the core reason COIN-M is riskier than USDⓈ-M.
Miner Zhang produces 1 BTC per month and is worried about a price drop in three months.
Trade: open a BTCUSD Quarterly short for 10 contracts (1,000 USD notional), post 0.001 BTC of margin, 1x leverage.
Three months later, no matter what BTC does, Zhang has locked in a sell price.
Good for: miners, long-term holders, institutional hedgers.
Mr. Li holds 10 BTC and is bullish over the next year.
Trade: moves 2 BTC into COIN-M, opens a BTCUSD Perpetual long at 2x leverage, notional roughly 240,000 USD.
If BTC goes from 60,000 to 90,000 in a year, the long makes about 1.33 BTC, which stacks on top of spot appreciation.
Risk: a mid-year dump toward 40,000 could liquidate the long and burn the margin. Set stops or rebalance margin periodically.
Strategy: when the current-quarter contract trades at a +5% premium to the perpetual, go long perpetual and short quarterly, then wait for the basis to converge.
Trade: open two BTC-margined positions of equal notional but opposite direction, both at 3–5x leverage.
Profit sources: the basis naturally converging toward expiry, plus funding rate when it tilts in your favor.
Good for: intermediate users with quantitative experience who track funding rate and basis. See the funding rate arbitrage guide.
The margin asset. COIN-M uses BTC, ETH and other coins as both margin and settlement; USDⓈ-M uses USDT or USDC stablecoins. COIN-M fits long-term holders who want to amplify coin returns or hedge, while USDⓈ-M is easier for USD-denominated, risk-controlled trading.
It's the smallest trading unit. One BTC contract represents 100 USD of notional; other coins use 10 USD per contract. So 100 BTCUSD contracts = 10,000 USD of exposure.
Isolated mode: at most the margin allocated to that position. Cross mode: at most the full Coin-Margined wallet balance. Binance's insurance fund absorbs bankrupt losses, so you will not normally owe the exchange.
Perpetuals have no expiry and use funding to track spot, which fits short- and mid-term trading. Quarterlies have a fixed expiry (current or next quarter), no funding, and are best for hedging and basis arbitrage.
Long PnL = contracts × contract size × (1/entry − 1/exit). Shorts flip the signs. The result settles in the margin coin.
Yes. Short profits are paid out in the underlying coin, which is perfect if you are long-term bearish but want to keep your spot stack untouched.
(1) Confusing contracts with coin quantity; (2) blowing up the BTC wallet once with Cross + high leverage; (3) bleeding funding on perpetuals held for weeks. Stick to 1–3x isolated and start with 1–2 contracts.
This article was written independently by the BN-App team and is for educational purposes only. It is not investment advice. Crypto trading carries significant risk — trade responsibly.
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