Futures Trading

Step 1: Opening a Position

Action: The user opens a perpetual futures position by providing collateral in USDT and selecting leverage. The platform calculates required margin and maximum position size.

Formula:

• $Maximum Position Size = Collateral × Leverage$

• $Required Margin = Position SizeLeverage$

• $Initial Margin Ratio = 1Leverage$

Example:

• Collateral: 1000 USDT

• Selected leverage: 5x

• Maximum position size: 1000 × 5 = 5000 USDT

• Required margin: 5000 ÷ 5 = 1000 USDT

• Initial margin ratio: 1 ÷ 5 = 20%

Outcome: Position is opened with specified parameters, and the required margin is locked as collateral.

Step 2: Position Management

Action: The user manages their position by monitoring and adjusting risk parameters. The platform continuously calculates position PnL and margin ratios.

Formula:

• $Unrealized PnL = (Current Price - Entry Price) × Position Size × Side$

  • Side = -1 for shorts, 1 for longs,

• $Margin Ratio = (Collateral + Unrealized PnL)Position Size$
• $Liquidation Price = Entry Price × (1 ± Maintenance Margin Ratio × Leverage)$

  • + for shorts, - for longs

Example:

• Entry price: 2000 USDT

• Position size: 5000 USDT (2.5 units)

• Current price: 2100 USDT

• Long position PnL: (2100 - 2000) × 2,5 = 250 USDT

• New margin ratio: (1000 + 250) ÷ 5000 = 25%

Outcome: Position status updated in real-time with current PnL and risk metrics.

Step 3: Fee Calculation

Action: The platform calculates and charges trading fees based on position size and holder status.

Formula:

• $Standard Fee = Position Size × Base Fee Rate$
• $Discounted Fee = Position Size × Base Fee Rate × (1 - Discount Rate)$

Example:

• Position size: 5000 USD

• Base fee rate: 0,1%

• Standard fee: 5000 × 0,001 = 5 USDT

• Additional discounts: 20%

• Discounted fee: 5 × (1 - 0,2) = 4 USDT

Outcome: Fees are automatically deducted from the user's account.

Step 4: Position Closure

Action: The user closes their position either manually or through automated triggers (take-profit/stop-loss).

Formula:

• $Realized PnL = (Exit Price - Entry Price) × Position Size × Side - Total Fees$
• $ROE (Return on Equity) = Realized PnLInitial Margin × 100$

Example:

• Entry price: 2000 USDT

• Exit price: 2100 USDT

• Position size: 5000 USDT

• Total fees: 8 USDT (entry + exit)

• Realized PnL: (2100 - 2000) × 2,5 - 8 = 242 USDT

• ROE: 242 ÷ 1000 × 100% = 24,2%

Outcome: Position is closed, PnL is realized, and funds are returned to the user's available balance.

Step 5: Position Liquidation

Action: The platform automatically liquidates a user's position if the margin ratio falls below the maintenance margin requirement to prevent insolvency.

Formula:

• Liquidation Price (for longs):$\text{Liquidation Price} = \text{Entry Price} \times \left(1 - \frac{\text{Initial Margin Ratio} - \text{Maintenance Margin Ratio}}{\text{Leverage}}\right)$
• Liquidation Price (for shorts): $\text{Liquidation Price} = \text{Entry Price} \times \left(1 + \frac{\text{Initial Margin Ratio} - \text{Maintenance Margin Ratio}}{\text{Leverage}}\right)$

Example:

• Entry Price: 2000 USDT

• Position Size: 5000 USDT (2.5 units)

• Leverage: 5x

• Maintenance Margin Ratio: 2%

• Liquidation price for a long position: $2000 \times \left(1 - \frac{0.20 - 0.02}{5}\right) = 2000 \times 0.96 = 1920 \, \text{USDT}$
• Liquidation price for a short position: $2000 \times \left(1 + \frac{0.20 - 0.02}{5}\right) = 2000 \times 1.04 = 2080 \, \text{USDT}$

Outcome: If the market price reaches the liquidation price, the platform closes the position at the current market price.