Guide to Future Contracts
Futures also are known as the Perpetual contract is a financial derivative that allows for leverage spot trading. HUAX currently offers up to 100X long/short Bitcoin, Ethereum and XRP.
Futures
Address
Maker Fees
Taker Fees
To open Long/Short X100 position on BTC , select "Contract" at the home page or visit here: https://www.huax.com/contract/quote/BTC-SWAP-USDT
For demo purposes, we will use TBTC-SIMU-BUSDT pair, which follows the pricing movement of BTC-SWAP-USDT. Get your free 0.5 TBTC + 1000 BUSDT by registering an account and visit https://www.huax.com/contract/quote/TBTC-SIMU-BUSDT.
In perpetual contract trading, traders only need to pay a small amount of margin according to trade higher-value contracts. Traders can therefore make use of different tools to increase their profit, which involves greater risks.
Features
Content
Balance
The Exchange Chart shows the historic price ranges and transaction volume for that pairing. The top bar shows the options for the time period per bar and custom chart settings. The sidebar shows options for personalizing your charts.
Est.Funding
The "funding" mechanism is used to anchor the perpetual contract price to spot market price. Funding occurs every 8 hours, after the daily settlement at 04:00 ,12:00 and 20:00 (UTC Time). If you close your position prior to the funding time, then you will not pay or receive funding fee.Funding fee = position value * funding rate (The funding rate is determined by the difference between contract price and spot index price between last and current settlement time). When the funding rate is positive, longs pay shorts. When it is negative shorts pay longs. (The platform does not charge any fees in the funding process. Funding fees are exchanged directly between traders.)
Underlying Index
Perpetual contract will be using underlying asset price for liquidation reference. This will reduce the frequency of liquidation as perpetual contract is a very risky and high-leverage product. By setting the underlying price as reference instead of the last trade price, this will serve users to their best interest.
PostOrder
Limit order and wait to fill
IOK
Execute all that's possible, and cancel unfill portion
FOK
Either fill all executed orders or not fill it at all.
Stop Limit
Trigger price level hit, execute orders
Open Position
Execute long/short
Closed Position
Close all position
What is ADL (Auto-Deleveraging)?
Maintenance Margin Ratio (MMR) is the lowest required margin ratio for a user to maintain the current open position(s). It is used to prevent large position from being liquidated, causing big impact on market liquidity. Basically, the larger the positions held, the higher MMR will be required, and the lower the leverage will be available.
When will forced-liquidation be triggered?
An ADL system is introduced to avoid market impacts caused by liquidation of large positions and margin call losses. If the system has incurred a catastrophic liquidation, which the insurance fund cannot cover, the system will close out positions of clients who has higher effective leverages. The clients will be given full notice if such event happens.When a user's maintenance margin ratio falls below the tier's required level, the contract position will be closed at its liquidation price and taken over by the forced liquidation engine. This is to avoid market impacts caused by cascade liquidation and margin call losses (losses caused by unfulfilled liquidated positions) under volatile market conditions.
Please ensure that the margin limit is more than the expected liquidation requirements to avoid the system triggering the liquidation request. If you need to change the position value, please adjust the margin at any time. Take profit/loss setting, when the price reaches the specified price, the system brakes according to user requirements.
For any questions or suggestions, can reach out to us at [email protected]
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