Poloniex Futures launched in beta on July 10, 2020. Below are the answers to some of our frequently asked questions about futures trading. For more information on our beta period, please visit our Help Center article here.
What are Futures traditionally?
A futures contract is an agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time (named delivery date) in the future.
What are perpetual futures and how do they work?
A perpetual contract has no expiry date and the contract is available for trading permanently, while a delivery contract has an expiry date and will be settled to a price derived from the underlying asset according to a pre-specified rule.
Specifically, the Bitcoin mini perpetual contract is aimed to replicate the underlying Bitcoin spot market but with flexible leverage. The contract has no expiration date and is designed to closely track the underlying reference Price Index via the Funding Rate mechanism.
Further information about perpetual contracts can be found in this Help Center article.
Why can’t I trade on Poloniex Futures?
Currently, Poloniex Futures is only available for customers who do not reside in the regions outlined below. If your Poloniex account fits these requirements and you cannot trade on Poloniex Futures, please reach out to us for help.
Residents, nationals or agents of Antigua and Barbuda, Algeria, Bangladesh, Bolivia, Belarus, Burundi, Burma, Cote D'Ivoire (Ivory Coast), Crimea and Sevastopol, Cuba, Democratic Republic of Congo, Ecuador, Iran, Iraq, Libya, Mali, Morocco, Magnitsky, Liberia, North Korea, Nepal, Seychelles, Somalia, Sudan, Syria, Venezuela and Zimbabwe are not able to trade on Poloniex Futures. For more details, please read our User Agreement.
What’s your insurance fund?
An insurance fund is a pool of funds that is used to address unfilled liquidations before they are filled by our auto-deleveraging system. The fund is built up when liquidations occur in the market at a better price than the bankruptcy price of that particular position. You can view the details of our insurance fund here.
For example, if you open a long position in BTCUSDTPERP and your position margin is 1 BTC, the liquidation price is 9,000 USDT, and the bankruptcy price is 8,900 USDT. When the mark price of the position falls to 9,000 USDT, the liquidation will be triggered. In this case, if your position is closed at a price higher than 8,900 USDT, the remaining margin after liquidation will be added to our insurance fund.
How is profit/loss calculated?
There are two types of Profit and Loss (PnL): Realized PnL and Unrealized PnL.
Realized PnL is based on the difference between the entry price and exit price of your position and takes any trading fees you pay into account.
Unrealized PnL is based on the difference between the average entry price and mark price of your position. When you have a positive or negative unrealized PnL immediately after an order executes, that means the mark price is different from the last price but does not necessarily mean that you lost money in your position.
What fees do you charge?
Our maker/taker fee schedule on Poloniex Futures is -0.026% maker / 0.075% taker for all customers, no matter how much is being traded.
What is/how is leverage applied?
Poloniex Futures offers leverage on all of our Futures and Perpetual Swap products. Leverage is determined by the Initial Margin and Maintenance Margin levels, which specify the minimum funds you must hold in the account to enter and maintain a position.
Leverage is divided into initial leverage and actual leverage. The initial leverage is the leverage multiple manually set when opening a position. These leverage multiples range from 0.01x to 100x. After opening a position, the actual leverage will change as the unrealized profit and loss changes. Then the leverage multiple can be a decimal, up to 100x.
Further information on leverage can be found in this Help Center article.
What is a liquidation?
To keep their positions open, traders are required to hold a percentage of the value of their position, i.e., the Maintenance Margin percentage. If a trader fails to fulfill the maintenance requirement, their position will be liquidated and the maintenance margin will be lost.
Further information on liquidation can be found in this Help Center article.
What is bankruptcy?
If your account balance falls into a negative balance, the insurance funds will be applied to cover the cost, but if the insurance funds are not sufficient to cover the extra cost of the liquidation, Auto-Deleveraging (ADL) will be triggered to protect the trader from losing more than their fixed amount of margin.
Will Poloniex Futures be available in your mobile apps?
Yes! Poloniex Futures is available in both our iOS and Android apps
What are the risks of trading futures?
The use of leverage and collateral to trade cryptocurrencies is complex and risky. When trading futures, you may realize substantial gains or losses and should be well prepared before you begin trading. Relatively small price movements will have a larger impact on your trading. Even in times of low price volatility, it is possible for the total balance in your futures wallet to be liquidated. Please read our Help Center article to learn more about the risks of futures trading.