About Perpetual Futures Trading Pairs, Leverage and Limits

1

Introduction to Perpetual Futures

BingX Perpetual Futures is a perpetual contract that uses USDT as margin and supports limit order. 

The Standard Futures contract has a delivery date and has an unpredictable future price that may deviate from the spot price greatly. In contrast, Perpetual Futures uses "funding rate" to ensure that the price of the perpetual contract converges with the mark price in the long term.

When trading with Perpetual Futures, traders should note the following:

1) Mark price: It is used to calculate the unrealized profit and loss, prevent price manipulation and converge the price of perpetual contracts with the spot price.  

Mark price = moving average (price index)

(Calculated based on a moving average basis)

When going long, unrealized PnL = position volume * (mark price-average position price)

When shorting, unrealized PnL = position volume * (average position price-mark price)

2) Fixed Margin and Margin Rate: 

Fixed margin = Opening value / Leverage

Where, Opening value = Average opening price * Quantity

In cross margin mode, the margin rate = equity / (position value + frozen value)

In isolated margin mode, the margin rate = (fixed margin + unrealized PnL) / position value

Where, position value = mark price * quantity;

Under isolated margin mode, the fixed margin varies with the user's manual adjustment or the settlement of funding fees.

When the margin is lower than the maintenance margin, auto-liquidation will occur. It is strongly recommended that traders close their positions above the maintenance margin to avoid higher fees from auto-liquidations.

3) Funding rate:

Without a fixed delivery date, the perpetual contract price and spot price may never converge. In order to make the perpetual contract trading price close to the spot price, we’ve introduced the funding mechanism. Funding fees do not go to the exchange, instead, they are exchanged between the long and short positions. If the funding rate is positive, long position holders shall pay funding fees to short position holders, and vice versa.

Funding fee payments occur every 8 hours at 00:00, 08:00, and 16:00 (UTC+8) for BingX Perpetual Futures.

4) Risk:

Perpetual Futures involves leveraged trading, and some trading pairs support high leverage. When going for leveraged trading, not only the position value but also the risk is amplified. Traders should be aware of the high risks that come with high leverage. 

2

List of limits and leverage of Perpetual Futures:

Maximum limit = (current position + order amount)