Reverse contracts are also called currency-based contracts. The denominated currency is USDT and the settlement currency is the base currency.
For example, BTC/USDT reverse contract, USDT is the pricing currency, and BTC is the base currency and settlement currency.
Reverse contracts need to hold the base currency before they can conduct their contract transactions. If you want to trade Bitcoin contracts, you must have Bitcoin as your base currency to trade BTC/USDT reverse contracts.
Users need to hold digital currencies such as BTC/ETH/EOS/BCH as margin, so even if the user does not trade, there is a certain currency risk.
Calculation of realized profit and loss of reverse contract:
Contract Realized Profit and Loss = (Contract Multiplier/Average Opening Price-Contract Multiplier/Average Closing Price) * Number of Closed Positions
For example, a user buys and opens 1,000 BTC/USDT contracts at an average opening price of 8,000 USDT, and then sells and closes 1,000 contracts at an average closing price of 10,000 USDT.
The contract realized profit and loss = (1 / 8000-1 / 10000) * 1000 = 0.025 BTC.
Contract realized profit and loss = (contract multiplier / average closing price-contract multiplier / average opening price) * closing quantity
For example, a user sells and shorts 1,000 BTC/USDT contracts at an average opening price of 8,000 USDT, and then buys and closes 1,000 contracts at an average closing price of 10,000 USDT.
Then the realized profit and loss of the contract = (1 / 10000-1 / 8000) * 1000 =-0.025 BTC.