How it works?
Simple Futures differs from Standard Futures, offering an easier, faster, and more streamlined trading experience. Users can trade more quickly and find it simpler to operate and start trading. Below are some guidelines to get started with Simple Futures:
- UP：Indicating an uptrend. If users expect the price to increase, they can select UP as the direction. Users will then gain profit when the price rises.
- DOWN：Indicating a downtrend. If users expect the price to decrease, they can select DOWN as the direction. Users will then gain profit when the price drops.
- Leverage：The minimum leverage supported in Simple Futures is 20x, while the highest leverage is 500x. The higher the chosen leverage, the greater the risk.
Funding Rate: The Funding Rate is calculated hourly. When the market is expect to have an uptrend, the Funding Rate is positive. In this scenario, users holding UP positions will need to pay a Funding Fee to those holding DOWN positions.
The higher the leverage of the positions, the greater the risk. Users will be charged a funding fee if they hold a position for more than 1 hour. The funding rate and funding fee, which users pay to (or receive from) traders on the opposite side of the trade, depend on market conditions.
Calculation of Profit and Loss (PNL), Return on Equity (ROE), and Liquidation Price
PNL= Size of position * (Last Price - Entry Price) * Direction
Size of position = Initial Margin * Leverage / Entry Price
If the position direction is UP, the calculation of position direction will be 1, whereas if the position direction is DOWN, the calculation of position direction will be -1
ROE% = PNL/ Initial MarginFor example: If the last price of BTCUSDT now is 26.250 USDT and the user would like to go UP, user places an initial margin of 5 USDT with 200x leverage and an entry price of 26,266 USDT.
Unrealized PNL = (5*200/26,266) *(26,250 - 26,266) = - 0.6091 USDT
ROE% = - 0.6091/5 = -12.18%