Futures Trading – x.me

What is Futures Trading?

Futures Trading refers to a trading method where users use margin to participate in the price movements of crypto assets, such as Bitcoin and Ethereum. Unlike Spot Trading, Futures Trading allows users to go long, meaning to profit from price increases, or go short, meaning to profit from price decreases. This allows users to potentially profit in both rising and falling markets.

Since Futures Trading usually involves leverage, potential returns may be higher, but the risks are also significantly greater. Price fluctuations may quickly trigger margin risk or amplify losses. Users should trade carefully and manage risks properly.

What are Perpetual Futures?

Perpetual Futures are Futures products without a fixed expiry or settlement date. As long as users meet the margin requirements, they can hold positions for the long term without worrying about automatic settlement at expiry.

Perpetual Futures usually use the funding rate mechanism to keep the Futures price close to the Spot price. This allows users to flexibly manage long and short positions while accessing leveraged trading opportunities. However, risk management remains essential.

What is the difference between Futures Trading and Spot Trading?

Spot Trading means users directly buy or sell digital assets, and the assets are credited to the account immediately after execution. Futures Trading, on the other hand, is margin-based trading on asset price movements. Users can choose to go long or short, and can use leverage to amplify both profits and risks.

Does Futures Trading support leverage?

Yes. Users can adjust leverage within the range allowed on the trading page. The higher the leverage, the higher the risk.

How do I open a position?

In Futures Trading, users select the trading pair, trading direction, leverage, order type, and quantity, then submit the order. Once the order is filled, a position is opened. Position modes include:

One-way Mode: One position direction is allowed for each Futures pair. Users can only hold either a long position or a short position at the same time.
Hedge Mode: Users can hold both long and short positions on the same Futures pair at the same time, with profit and loss calculated separately.

How do I close a position?

On the Positions page, users can select the position they want to close and operate in different ways.

Available in the order placement area:

Use limit or market close orders to close positions in batches or step by step
Set Take Profit / Stop Loss conditions, also known as trigger orders, to automatically close the position when the trigger price is reached

Available in the order area:

Manually close submitted limit or market orders
Close all positions with one click, or select part of a position to close
Set Take Profit / Stop Loss conditions to automatically close the position when the trigger price is reached

Through these methods, users can flexibly manage positions, control risks, and lock in profits.

What is Cross Margin?

In Cross Margin mode, the available margin in the account may be shared to cover position risks. When a position incurs losses, the available balance may be used to maintain the position.

What is Isolated Margin?

In Isolated Margin mode, the margin of each position is relatively independent. The maximum loss is usually limited to the margin allocated to that position.

What is Mark Price?

Mark Price is a reference price set by the platform for Futures Trading. It is used to calculate unrealized PnL and liquidation risk, rather than serving as the actual execution price.

Its main functions include:

Reducing volatility impact: It helps prevent incorrect liquidation caused by short-term abnormal market fluctuations or extreme execution prices.
Calculating PnL: Mark Price is used as the basis for unrealized PnL, making PnL more stable and predictable.
Risk control: Mark Price is used in liquidation calculations instead of the latest traded price, making risk assessment more reasonable and helping protect user funds.

In short, Mark Price is a smoothed reference price that helps ensure more stable Futures risk management and PnL calculation, reducing the impact of instant abnormal market fluctuations.

Why does liquidation happen?

When position losses cause the margin to fall below the level required to maintain the position, the system may trigger forced liquidation to prevent the account from going into negative balance.

Maintenance Margin: The minimum margin level that must be maintained while holding a position. If the account balance falls below this level, the position may face liquidation.
Impact of Unrealized PnL on Margin: Floating losses on a position consume margin. If the losses are too large and cause available margin to fall below the maintenance margin, liquidation will be triggered.

In short, maintenance margin is the safety threshold for a position. If the margin falls below this level, the position may be forcibly liquidated by the system.

How can I reduce liquidation risk?

Users can reduce leverage, control position size reasonably, set Take Profit and Stop Loss, maintain sufficient margin, and avoid overtrading during highly volatile market conditions.

Is Futures Trading suitable for all users?

No. Futures Trading carries high risk and may result in significant losses. Users should use it carefully according to their own risk tolerance.