Inverse Perpetual Contract

Inverse perpetual contract is traded based on the underlying cryptocurrency. Compared to USDT perpetual contract, the calculation of margin and P&L of USDT perpetual contract is less direct. Since users use underlying coins as margin instead of USDT, which means that traders bear higher risk and have to hedge their position to avoid the risk of holding the cryptocurrency. Click the links to know how to trade inverse perpetual contract on APP and PC.

1.Trading Fee: maker :0.02%, taker: 0.07%.

Formula:

Trading Fee = Contract Face Value x Trading Fee Rate/ Order Price
Order value =Contract Face Value x contract size / Order Price

Trader A buys 100 BTCUSD contracts using Market order. (1 contract face value=100USD)
Trader B sells 100 BTCUSD contracts using Limit order. (1 contract face value=100USD)

2.Market Mechanism
When trading with perpetual contracts, traders need to understand the market mechanism of the perpetual market. Click here to find out more.

There is a featureful function, which is called Merge and Split Position Mode.

a. Merge Mode: When opening a new merge position in the same direction and with the same trading pair, the new order will be merged into your current merge position after filled. This means that in the merge-mode of each trading pairs you will have a maximum of two positions, one long and one short.

b. Split Mode: You can create multiple positions in the same direction or in different directions on the same trading pair. These positions exist independently from each other, allowing for greater flexibility in position management.

3.Bonus

Users can get the bonus through account deposit and cumulative contract transaction. The bonus is consistent with the real digital assets in the transaction, and can be used as the account equity / available margin of the inverse perpetual account to earn real digital assets.

As the digital asset, bonus exists in user’s inverse perpetual contract account and expire after 3 days . The expiration date can be extended by obtaining new bonus.

Bonus is only for trading or fee deduction, it CANNOT be withdrawn. But if you made profits by trading with bonus, you can withdraw the profits.

4.Initial Margin and Maintenance Margin

Margin
In the virtual contract market, traders only need to pay a small number of funds at a certain rate according to the contract price as a financial guarantee for the performance of the contract, and then they can participate in the trading of the contract. This kind of funds is the virtual contract margin.

Initial margin
Initial margin refers to the minimum amount of collateral required to open a position in a leveraged trading.
Initial margin = position value / leverage

5.Liquidation Process and Calculation Formula for Liquidation

Explanation of the liquidation formula under the two position modes:

Cross Mode
Long position liquidation price = contract face value * position quantity * (contract maintenance margin rate + 1) / (account balance-other contract maintenance margin + other contract unrealized profit and loss + contract face value * position quantity / average opening price)

Short position liquidation price = contract face value * position quantity * (contract maintenance margin rate-1) / (account balance-other contract maintenance margin + unrealized profit and loss of other contracts-contract face value * position quantity/ average opening price)

Isolated Mode
Long position liquidation price = contract face value * position quantity * (contract maintenance margin rate + 1) / (contract face value * position quantity / average opening price)

Short position liquidation price = contract face value* position quantity *(1-contract maintenance margin rate) / (face value of contract * position quantity /average opening price)

Liquidation
Deepcoin uses a reasonable price marking method to avoid forced liquidation due to insufficient liquidity or market manipulation.

Deepcoin has added the last price as the basis for calculating forced liquidation price under the former forced liquidation process. That is, the forced liquidation process is triggered only when the last price and the mark price reach the forced liquidation price at the same time.

Click here to find out more.

6.Profit and Loss Calculation

Unrealized contract profit and loss
Long position: contract unrealized profit and loss = (1/opening average price-1/mark price) * contract size * contract face value
Short position: contract unrealized profit and loss = (1/mark price-1/average opening price) * contract size* contract face value

Liquidation profit and loss (excluding capital costs and transaction fees)
Long position: contract realized profit and loss = (1/opening average price-1/closing price) * contract size * contract face value
Short position: contract realized profit and loss = (1/closing price-1/average opening price) * contract size* contract face value

Realized profit and loss calculation (including funding costs and transaction fees)
Realized profit and loss = closing profit and loss-(all costs)
All costs = opening commission fee + closing commission fee + funding cost

Average opening price = contract face value * total contract size / contract value
Contract value = [(contract face value*contract size1 / price1) + (contract face value*contract size 2/price2) + (contract face value*contract size 3/price3)….]

7.Funding cost

Funding costs are charged every 8 hours, and the collection time is at 08:00, 16:00 and 24:00 (HKT) every day. Only when holding positions at the moments, holders would need to pay or collect funds.

Calculation of funding rate:
Funding rate consists of two parts: interest rate and premium/discount. This rate is designed to ensure that the transaction price of the perpetual swap contract closely follows the underlying reference price. In this way, swap contracts are similar to the spot market for margin trading, where buyers and sellers exchange funding rates regularly.

The funds you paid or received are calculated as follows:
Funding cost = position value * funding rate
Position value = contract size *face value / latest mark price

Click here to find out more.

8.Contract Trading Calculator

Deepcoin contract trading platform provides online calculator to help you calculate the profit, Close Price and Liquidation Price of an order. Click here to read the manual.

Website: https://deepcoin.com/en

Twitter:

English: https://twitter.com/Deepcoin_global

Japanese: https://twitter.com/Deepcoin_JP

Telegram:

English: https://t.me/deepcoinglobal

Japanese: https://t.me/deepcoinja

Help Center:

https://support.deepcoin.com/hc/en-001/categories/360003941211

Market Email: marketing@deepcoin.com

Deepcoin team

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This page is dedicated to providing descriptions of the products and tools offered by Deepcoin to manage your investment in cryptocurrency. Within spot and derivatives trading, we offer unique tools which allow you to make deeper and smarter trading decisions.

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Cryptocurrency spot & derivatives exchange on the market since 2018 helping over 1 million users boost their decision and invest to boost their future.

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