Perpetual Futures Trading Overview

• What is Futures Trading?

  • Perpetual Futures are unlike traditional futures contracts with a set expiration date — they have no expiration. Traders can hold their positions indefinitely as long as they meet the margin requirements, that is, until liquidation.

• How is Futures Trading Different from Spot Trading?

  • Spot
    • Spot trading involves buying or selling an asset at the current market price for immediate delivery.
  • Futures
    • Perpetual futures trading is a type of derivative trading where profit and loss are determined by price differences without actual delivery of the underlying asset.
    • This allows traders to take advantage of price fluctuations to generate profit, and with leverage, they can operate positions larger than their actual capital.
    • While leverage can maximize profit potential, it also increases risk. Traders should consider this carefully before investing.
  • Index Price: This refers to the market average price calculated from the spot prices of major exchanges. It reduces price distortion and ensures that positions are valued based on real market conditions, preventing traders from being unfairly liquidated.

• What Fees Are Incurred in Futures Trading?

1. 1. Trading Fees

      • Trading fees are charged to both the buyer and seller when a trade is executed. The rate varies depending on the exchange and may also vary by user level.

      • Maker Fee: The fee charged when placing a limit order. The base fee is 0.02%.

      • Taker Fee: The fee charged when placing a market order. The base fee is 0.06%.

        For more details about Coinness Trade’s trading fees, please see below.

        What are Trading Fees?

   2. Funding Fee

      • This is the cost exchanged between longs and shorts to minimize the price gap between spot and futures markets. The percentage is called the funding rate. When the funding rate is positive, longs pay shorts; when it is negative, shorts pay longs. For more details, see below.

        What are Funding Fees?

• Can Trading Fees Be Reduced? (VIP Tiers)

• • VIP Tier Fee Reduction Structure

    • Coinness Trade has a VIP system that assigns users a tier based on their trading volume and account balance. The higher your VIP tier, the lower your trading fees. In other words, higher trading volume and capital result in lower trading fees.

    • VIP tiers are calculated based on your 30-day average trading volume and balance. For more details, see below.

      What are VIP fees?

VIP Tier Criteria (Trading Volume + Token Balance)

• Futures Trading Limits

1. 1. 1. Minimum Order Quantity

         • The minimum order quantity varies for each pair. Example:

         • e.g. BTCUSDT: 0.0001 BTC, ETHUSDT: 0.01 ETH

           Check the [Minimum Order Quantity] section at the bottom of the page for each pair.

           Contract Details

      2. Maximum Leverage

         • The maximum leverage limits vary by coin and may be adjusted according to exchange regulations.
           • BTCUSDT: up to 125x
           • ETHUSDT / XRPUSDT / SOLUSDT: up to 100x
           • Others: up to 50x

      3. Risk Limit

         • The risk limit sets a maximum potential loss to prevent unnecessary losses. Risk limits differ by pair. See below for more details.

           What is Risk Limit?

• Key Futures Trading Rules

1. 1. Account Requirements
      • KYC verification is required to trade futures. Please complete KYC Level 1.
      • After depositing funds into Coinness Trade, transfer them from the Funding Wallet to the Futures Wallet to start trading.
   2. Order Types
      • Limit Order: Place an order specifying the price and quantity.
        • Execution condition: The order is filled only when the market price reaches your set price.
        • Advantage: Buy at your desired price.
        • Disadvantage: May not fill immediately.
      • Market Order: Buy/sell at the best available market price immediately.
        • Advantage: Immediate execution.
        • Disadvantage: Slippage may occur.
      • Conditional Orders
        • Stop Limit Order: A stop price triggers a limit order, which is then filled only at or above/below the limit price.
        • Stop Market Order: A stop price triggers a market order, executed immediately at market price.
   3. PnL Calculation
      • rPnL (Realized Profit & Loss) + uPnL (Unrealized Profit & Loss)
        • Realized PnL: Actual profit/loss from completed trades.
        • Unrealized PnL: Profit/loss from open positions that fluctuate in real-time.
      • PnL Change from Leverage Adjustment
        • Adjusting leverage does not change the PnL of open positions but changes the margin requirement and affects the future magnitude of profit/loss. Higher leverage amplifies PnL for the same price movement; lower leverage reduces it.
   4. Funding & Profit Distribution
      • Funding Rate: Periodic fee exchanged between longs and shorts to keep futures and spot prices aligned. When positive, longs pay shorts; when negative, shorts pay longs.
      • Funding Fee Payment Conditions
        • Funding rate > 0: Long → Short
        • Funding rate < 0: Short → Long
      • Settlement Cycle: Every 8 hours
        • 00:00 / 08:00 / 16:00 (UTC)
   5. Risk Management

      • Liquidation

        • Liquidation occurs when margin falls below the maintenance margin requirement, automatically closing positions to prevent losses from exceeding account balance.

        • Liquidation Process

          1. Enter position: Open a long/short with margin.

          2. Market moves against you: Losses increase, margin approaches maintenance level.

          3. Trigger: When margin falls below maintenance level (based on index price), liquidation engine activates.

          4. Forced liquidation: Position is closed at market price.

          See below for more details.

          What is Liquidation?

      • ADL (Auto-Deleveraging System)

        • If the exchange insurance fund cannot cover losses, the system auto-deleverages opposing profitable positions to cover them.

      • Risk Limit

        • This is a risk management tool to limit exposure. As position size grows, initial and maintenance margin requirements increase and allowed leverage decreases.

          See below for more details.

          What is Risk Limit?

           

• FAQs

1. 1. When is the Funding Rate Settled?

      → Every 8 hours at 00:00 / 08:00 / 16:00 (UTC)

   2. Does PnL Change When I Adjust Leverage?

      → Changing leverage does not directly change your PnL, but future PnL fluctuations may increase or decrease.

   3. What Happens When a Position is Partially Liquidated?

      → Partial liquidation helps manage risk by closing part of a position to secure profit or maintain margin above the required level to prevent full liquidation.

   4. In What Order Are Positions Closed During Liquidation?

      → See [Risk Management] > [Liquidation] section above.

   5. Difference Between Cross and Isolated Margin?

      • Cross margin mode
        • Shares entire account margin across all open positions. Assets in the account are used as margin to prevent liquidation when needed.
        • Unrealized losses can offset unrealized gains to reduce liquidation risk.
        • Advantage: Lower liquidation risk, higher capital efficiency
        • Disadvantage: A single failed position can put the entire account at risk
      • Isolated margin mode
        • Each position has separate margin. Only the position that falls below maintenance margin will be liquidated.
        • Advantage: Risk isolation, limited loss
        • Disadvantage: Higher liquidation risk, less capital efficiency

For more details about margin modes, see below.

What is Margin Mode?