Quanto Perpetual Futures: Local-Currency Pricing with USDT Settlement

Summary

The document explains quanto perpetual futures through an example of a contract priced in Hong Kong dollars while margin, profit and loss, fees, and funding are settled in USDT. It illustrates the payoff for a long position as the price difference multiplied by the contract quantity, with settlement using a stated fixed conversion ratio. The structure lets traders take exposure to an asset priced in another currency without converting their collateral or settling directly in that local currency.

It also describes the product’s trading features, including leverage, continuous trading, periodic funding, margin requirements, and liquidation, then outlines basic steps for opening a position. These details are presented as features of a named exchange and example contract, not as general terms for every quanto product. The document provides no independent evidence that the contract closely tracks its underlying stock or eliminates all currency-related risks; readers would need to check contract specifications, pricing mechanics, and exchange terms before relying on those claims.

Key ideas

• Quanto contracts can price an underlying asset in one currency while using another currency for margin and settlement.
• The example calculates long-position profit from the change in quoted price multiplied by the contract quantity.
• The document says fees, funding, and maintenance margin are based on USDT notional value.
• Leverage, funding payments, and liquidation rules affect the risk of trading these perpetual contracts.
• The described terms apply to the cited exchange product and should not be assumed for other quanto contracts.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.