Coin-margined commonly describes derivatives whose margin and profit-and-loss settlement use a cryptocurrency such as BTC or ETH. The label usually distinguishes these products from stablecoin-based contracts, although actual collateral eligibility depends on the account setup.
A dollar quote can produce coin PnL
A common design is an inverse contract with a fixed dollar face value and settlement in the underlying coin. Its coin-denominated payoff uses reciprocal prices, so the linear formula of quantity times a price difference is not interchangeable with it.
However, “coin-margined” identifies the margin arrangement, not a universal payoff formula. The contract specification must confirm the quote currency, unit size, calculation method and settlement asset. Products may be perpetual or have an expiry.
Collateral carries its own price exposure
When BTC is posted as collateral, its value in dollars changes with BTC’s market price even before considering the derivative’s PnL. A losing long can therefore face both trading losses and a decline in the dollar value of its collateral. An opposite-direction trade may offset some risks but does not remove all of them.
Some unified accounts accept alternative collateral for coin-settled contracts. Fees, funding where applicable, valuation discounts and liquidation rules still depend on the product and platform.