BitMart Futures is a futures trading market, specifically a market for perpetual swaps, offered per the Terms and Conditions for BitMart Futures Market.
Below is the [Introduction] for BitMart Futures:
The Perpetual Swap refers to a kind of derivative that is similar to a traditional future and can provide high leverage. It differs from traditional futures in the following aspects:
- No delivery date: perpetual swap doesn’t have an expiration time, so it doesn’t any limit on position-holding duration.
- Anchored spot market: in order to guarantee to track the underlying price index, the perpetual swap ensures that its price follows the price of an underlying asset through the mechanism of funding cost.
- Reasonable price marking: perpetual swap adopts a reasonable price marking method to avoid forced liquidation due to a lack of liquidity or manipulation of the market.
- Auto deleveraging (ADL) mechanism: perpetual swap uses the ADL mechanism instead of the account sharing mechanism to deal with the losses caused by force liquidation of big positions.
Difference Between a Perpetual Swap and a Traditional Futures
|Item||Perpetual Swap||Traditional Futures|
|Margin||USDT, monetary base||Monetary base|
|Settlement Date||No||Specific date per week, month, quarter, etc.|
|Leverage||10x, 20x, 50x, 100x||20x at most|
|Loss Mechanism||ADL mechanism||Shared by all accounts|
|Forced Liquidation Price||Reasonable price index||Last trading price|
|Price Equilibrium Mechanism||Funding cost rate||Regular delivery|
Market Mechanism of Perpetual Swap
Traders need to understand several mechanisms of the perpetual market when trading a perpetual swap. They should pay attention to the following key parts:
- Position marking: perpetual swap adopts reasonable price marking Marked price determines unrealized profit/loss and force liquidation price.
- Initial margin: The initial margin decides the leverage that you can use to open a position.
- Maintenance margin: The maintenance margin is the margin level required to maintain the minimum level of your position.
- Funding cost: buyers and sellers pay funding costs regularly, i.e. every 8 hours. If the rate is positive, long positions pay funding costs to short positions. If the rate is negative, short positions pay funding cost to long positions.
*You only need to pay or collect funding cost if you hold a position at funding timestamp.
The timestamp of funding cost:
UTC 4:00(UTC+8 12:00), UTC 12:00(UTC+8 20:00) and UTC 20:00(UTC+8 04:00)
The current funding rate can be found on the trading page of each Perpetual Swap. Historical rates can be found: https://futures.bitmart.com/information/funding?id=1