How to play KuCoin currency-standard contract

With KuCoin's Currency-Standard contract, traders can engage in futures trading with seamless settlement in USDT, embracing the benefits of perpetual contracts while bypassing their complexities.

Nov 24, 2024 at 12:10 pm

How to Play KuCoin Currency-Standard Contract

KuCoin's Currency-Standard contract, also known as USDT-M Futures, is a type of futures contract priced and settled in USDT. It follows the perpetual contract trading mechanism with an interest settlement mechanism to simplify the complexities associated with perpetual contracts.

To help you navigate the world of KuCoin's Currency-Standard contract, we've compiled a comprehensive guide that covers everything from opening an account to understanding the contract specifications.

Prerequisites

• Exchange Account: Create a KuCoin account or log in if you're an existing user.
• KYC Verification: Complete the Know Your Customer (KYC) verification process to enhance account security.
• Sufficient USDT Balance: Fund your account with sufficient USDT to cover your initial margin.

Steps

1. Create a Trading Account

If you don't have a KuCoin account, click "Sign Up" and follow the on-screen instructions to create one. Once your account is created, you'll need to complete KYC verification.

2. Deposit USDT into Your Account

Once your account is created, deposit USDT into your KuCoin account. You can do this by:

• P2P Trading: Buy USDT directly from other users on the KuCoin P2P platform.
• Cryptocurrency Deposit: Send USDT from another cryptocurrency wallet or exchange.
• Bank Transfer: Deposit USDT via your bank account (only available in some regions).

3. Understand Contract Specifications

Product Name: BTC/USDT-M
Contract Value: 1 BTC
Contract Unit: 0.001 BTC
Minimum Tick Size: 0.1 USD
Maximum Leverage: 100x
Initial Margin: 1%
Maintenance Margin: 0.5%

4. Open a Position

• Spot Trading: Connect your spot account in the Futures trading interface to use your spot assets as margin.
• Transfer Margin: Transfer USDT from your main account to your Futures account.
• Long Position: Buy a contract if you believe the asset's price will increase.
• Short Position: Sell a contract if you believe the asset's price will decrease.

5. Margin Management

• Initial Margin: The minimum amount of funds required to open a position.
• Maintenance Margin: The minimum margin balance required to maintain an open position.
• Risk Margin: The margin used to maintain an open position above the maintenance level.
• Leverage: Ratio that amplifies your position size using borrowed funds. High leverage increases potential gains and losses.
• Liquidation: Margin is liquidated if it falls below the maintenance margin requirement.

6. Settlement

• Interest Settlement: Funding rate is collected every eight hours to adjust positions with different leverage.
• Final Settlement: Final settlement occurs when a contract is expired or manually closed.

7. Monitor Your Positions

Regularly monitor your positions and manage your risk by:

• Setting Stop Loss and Take Profit Orders: Limit potential losses or lock in profits at predetermined price levels.
• Adjusting Margin: Add or reduce margin to maintain your position's safety.
• Closing Positions: Manually close your positions before expiration or liquidation.

8. Withdraw Funds

• Withdraw USDT: Once you've closed your positions and settled your account, you can withdraw USDT to your spot account or external wallet.
• Convert to Other Currencies: Convert your USDT to other cryptocurrencies through the spot market before withdrawing.