Glossary
What is an inverse perpetual contract?
Also called: inverse contract, coin-margined perpetual, inverse swap
Updated Ninja Terminal team
Definition
An inverse perpetual is a perpetual futures contract that is quoted in USD but margined and settled in the underlying cryptocurrency. Each contract has a fixed USD value, and profit and loss are paid in the coin. The payoff is not linear in USD, and collateral value moves with the coin price.
Inverse contracts were the first type of crypto perpetual. Bybit lists them as the Inverse Perpetual category, and Binance offers the same design as COIN-M futures.
How is PnL calculated?
For a long position:
PnL (coin) = contracts (USD) x (1 / entry price - 1 / exit price)
For a short, the sign is reversed.
Example: long 10,000 USD of contracts at 50,000, closed at 55,000.
- 1 / 50,000 = 0.00002000 BTC per USD
- 1 / 55,000 = 0.00001818 BTC per USD
- PnL = 10,000 x (0.00002000 - 0.00001818) = about 0.0182 BTC, worth about 1,000 USD at 55,000.
If price falls instead, the loss in coin terms grows faster than a linear contract would suggest, and the coin you hold as margin loses USD value at the same time.
How is it different from linear contracts?
| Inverse | Linear (USD-M) | |
|---|---|---|
| Margin | The coin | Stablecoin |
| PnL unit | The coin | Stablecoin |
| USD payoff | Non-linear | Linear |
Funding, mark price, and liquidation apply as for other perpetual futures.
What do the exchanges document?
Bybit’s position mode documentation lists inverse perpetual and inverse futures among the products that support both one-way and hedge mode. Its Unified Trading Account also covers Inverse Perpetual. See unified trading account.
Does Ninja Terminal support them?
Ninja Terminal currently supports USD-M (Binance) and linear (Bybit) perpetuals. It does not support inverse perpetuals at this time.
Frequently asked questions
Are inverse perpetuals riskier than linear ones?
They carry extra risk because the margin and the PnL are in a volatile coin. A falling price reduces collateral value and increases losses at once.
Why do inverse contracts use 1/price?
Contracts are sized in USD and settled in the coin, so each USD of contract is worth 1/price coins. The PnL formula follows from that.