Coin Margined Perpetual Contact Trading (Futures) om MEXC

Coin Margined Perpetual Contact Trading (Futures) om MEXC


Introduction: MEXC Coin-Margined Perpetual Contract

A Perpetual Contract is a derivative product that is similar to a traditional futures contract. Unlike a traditional futures contract, however, there is no expiry or settlement date. The MEXC perpetual contract uses a special funding cost mechanism to ensure that the contract price tracks the underlying price closely.

Contract Configuration:
Coin Margined Perpetual Contact Trading (Futures) om MEXC
The Market Mechanism of Swap

When trading perpetual contracts, a trader needs to be aware of several things:

  1. Position Marking: Perpetual Contracts adopt fair price marking. The fair price determines unrealized Profits and Losses (PnL) and liquidation prices.
  2. Initial and maintenance margin: These margin levels determine the trader’s leverage and the point at which forced liquidation occurs.
  3. Funding: This refers to periodic payments exchanged between the buyer and seller every 8 hours to ensure the contract price tracks underlying prices closely. If there are more buyers than sellers, the longs will pay the funding rate to the shorts. This relationship is reversed if there are more sellers than buyers. You will only be entitled to receive or obliged to pay the funding rate if you hold a position at specific Funding Timestamps.
  4. Funding Timestamps: 04:00 SGT, 12:00 SGT and 20:00 SGT.

Note: You will only be entitled to receive or obliged to pay the funding rate if you have an open  contract position at specific Funding Timestamps.

Traders can learn the current funding rate for a contract on the “Trade” tab under “Funding Rate”.


Funding Costs

The Funding Costs is the core operating mechanism of the MEXC Futures

The Funding Timestamps are as follows : 04:00 (UTC), 12:00 (UTC), 20:00 (UTC)

The value of your position is independent of your leverage multiplier. For example: if you hold 100 BTC/USDT contracts, you will receive or pay for funds based on the value of these contracts instead of how much margin you have allocated to this position.


Funding Cost Limits

MEXC caps the funding cost on its perpetual swaps to allow traders to maximise their leverage. This has been done in two ways.

The absolute upper limit of the funding cost is 75% of the (initial margin rate- maintenance margin rate).

For example, if the initial margin rate is 1%, the maintenance margin rate is 0.5%, then the max. funding cost is 75% * (1%-0.5%) = 0.375%.


The relationship between MEXC perpetual contracts and funding cost

MEXC does not take a cut of the funding rate. The funding rate is exchanged directly between traders in the long position and traders in the short position.
 

Fee

The MEXC transaction fees are as follows:

Maker fee    Taker fee

0.02%          0.06%

Note: If the contract fee is negative, a payment will be made to the trader instead. .
 

Additional Definitions:

Wallet balance =  Deposit amount - Withdrawal amount + Realized PnL

Realized PnL = Total PnL of closed positions - Total fees - Total funding cost

Total Equity = Wallet balance + Unrealized PnL

Position Margin = Funding for position, generally including all the users positions (cross or isolated) - Please note that the position margin of MEXC Futures only includes the traders’ isolated margin and the initial margin of the cross position, excluding the floating margin under cross positions.

The margin of open orders = all frozen funds of open orders

Available = Wallet balance - Margin of isolated position - Initial margin of cross margin positions - Frozen assets of open orders

Net asset balance = Funds available for asset transfers and the opening of new positions

Unrealized PnL = sum of all floating profits and losses
 

Coin Margined Perpetual Contact Trading Tutorial【PC】


Step 1:

Login at https://www.mexc.io click “Derivatives” followed by "Futures" to enter the transaction page.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 2:

The futures page contains a wealth of data about the market. This is the price chart of your selected trading pair. You may toggle between the basic, pro and depth views by clicking the options in the top right of the screen.

Information about your positions and orders can be seen at the bottom of the screen.

The order book gives you insight into whether other brokerages are buying and selling while the market trades section gives you information about the recently completed trades.

Finally, you can place an order on the extreme right of the screen.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 3:

The coin-margined perpetual contract is a perpetual contract denominated in a certain kind of digital asset. MEXC currently offers BTC/USDT and ETH/USDT trading pairs. More will come in future. Here, we will purchase BTC/USDT in an example transaction.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 4:

If you do not have sufficient funds, you may transfer your assets from your Spot account to your Contract account by clicking “Transfer” in the bottom right of the screen. If you do not have any funds in your Spot account, you may perform purchase tokens directly with fiat currency.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 5:

Once your contract account has the required funds, you may place your limit order by setting price and the number of contracts you would like to purchase. You may then click “Buy/Long” or “Sell/Short” to complete your order.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 6:


You may apply different amounts of leverage on different trading pairs. MEXC supports up to 125x leverage. Your maximum allowable leverage is dependent on the initial margin and maintenance margin, which determines the funds required to first open and then maintain a position.

You may change both your long and short position leverage in cross margin mode. Here’s how you can do it.

For instance the long position is 20x, and the short position is 100x. To decrease the risk of long and short hedging,  the trader plans to adjust the leverage from 100x to 20x.

Please click “Short 100X” and adjust the leverage to the planned 20x, and then click “OK”. Then the leverage of the position has now been reduced to 20x.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 7:

MEXC supports two different margin modes to accommodate differing trading strategies. They are Cross Margin mode and Isolated Margin mode.

Cross Margin Mode

In cross margin mode, margin is shared between open positions with the same settlement cryptocurrency. A position will draw more margin from the total account balance of the corresponding cryptocurrency to avoid liquidation. Any realised PnL can be used to increase the margin on a losing position within the same cryptocurrency type.

Isolated Margin

In isolated margin mode, margin assigned to a position is limited to the initial sum posted.

In the event of liquidation, the trader only loses margin for that specific position, leaving the balance of that specific cryptocurrency unaffected. Therefore, isolated margin mode allows traders to limit their losses to the initial margin and nothing more.

When in isolated margin mode, you can spontaneously optimise your leverage by means of the leverage slider.

By default, all traders start in isolated margin mode.

MEXC currently allows traders to change from isolated margin to cross margin mode in the middle of a trade, but in the opposite direction.

Step 8:

You may buy/go long on a position or sell/go short a position.

A trader goes long when they anticipate a price increase in a contract, purchasing at a lower price and selling it for a profit in the future.

A trader goes short when they anticipate a price decrease, selling at a higher price in the present and earning the difference when they re-purchase it in the future.

MEXC supports a variety of different order types to accommodate different trading strategies. We will next proceed to explain the different order types available.
 
Order Types
Coin Margined Perpetual Contact Trading (Futures) om MEXC
i) Limit order

Users can set a price that they are willing to buy or sell at, and that order is then filled at that price or better. Traders use this order type when price is prioritised over speed. If the trade order is matched immediately against an order already on the order book, it removes liquidity and the taker fee applies. If the trader’s order is not matched immediately against an order already on the order book, it adds liquidity and the maker fee applies.

ii) Market order

A market order is an order to be executed immediately at current market prices. Traders use this order type when speed is prioritised over speed. The market order can guarantee the execution of orders but the execution price may fluctuate based on market conditions.

iii) Stop Limit Order

A Limit Order will be placed when the market reaches the Trigger Price. This can be used to stop loss or take profit.

iv) Immediate or Cancel Order (IOC)

If the order cannot be executed in full at the specified price, the remaining portion of the order will be cancelled.

v) Market to Limit Order (MTL)

A Market-to-Limit (MTL) order is submitted as a market order to execute at the best market price. If the order is only partially filled, the remainder of the order is canceled and re-submitted as a limit order with the limit price equal to the price at which the filled portion of the order executed.

vi) Stop Loss/Take Profits

You may set your take-profits/stop-limit prices when opening a position.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
If you need to perform some basic arithmetic when trading, you may use the provided calculator function on the MEXC platform.
Coin Margined Perpetual Contact Trading (Futures) om MEXC

Coin Margined Perpetual Contract Trading Tutorial【APP】

Step 1:

Launch the MEXC app and tap “Futures” in the navigation bar at the bottom to access the contract trading interface. Next, tap the upper left corner to select your contract. Here, we will use the coin-margined BTC/USD as an example.
Coin Margined Perpetual Contact Trading (Futures) om MEXC Coin Margined Perpetual Contact Trading (Futures) om MEXC Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 2:

You may access the K-line diagram or your favourite items from the top right of the screen. You may also view the guide, and other miscellaneous settings from the ellipsis.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 3:

The coin-margined perpetual contract is a perpetual contract denominated in a certain kind of digital asset. MEXC currently offers BTC/USD and ETH/USDT trading pairs. More will come in future.

Step 4:

If you do not have sufficient funds, you may transfer your assets from your Spot account to your Contract account by clicking “Transfer” in the bottom right of the screen. If you do not have any funds in your Spot account, you may perform purchase tokens directly with fiat currency.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 5:

Once your contract account has the required funds, you may place your limit order by setting price and the number of contracts you would like to purchase. You may then click “Buy/Long” or “Sell/Short” to complete your order.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 6:

You may apply different amounts of leverage on different trading pairs. MEXC supports up to 125x leverage. Your maximum allowable leverage is dependent on the initial margin and maintenance margin, which determines the funds required to first open and then maintain a position.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
You may change both your long and short position leverage in cross margin mode. For instance the long position is 20x, and the short position is 100x. To decrease the risk of long and short hedging,  the trader plans to adjust the leverage from 100x to 20x.

Please click “Short 100X” and adjust the leverage to the planned 20x, and then click “OK”. Then the leverage of the position has now been reduced to 20x.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 7:

MEXC supports two different margin modes to accommodate differing trading strategies. They are Cross Margin mode and Isolated Margin mode.

Cross Margin Mode

In cross margin mode, margin is shared between open positions with the same settlement cryptocurrency. A position will draw more margin from the total account balance of the corresponding cryptocurrency to avoid liquidation. Any realised PnL can be used to increase the margin on a losing position within the same cryptocurrency type.

Isolated Margin

In isolated margin mode, margin assigned to a position is limited to the initial sum posted.

In the event of liquidation, the trader only loses margin for that specific position, leaving the balance of that specific cryptocurrency unaffected. Therefore, isolated margin mode allows traders to limit their losses to the initial margin and nothing more. .

When in isolated margin mode, you can spontaneously optimise your leverage by means of the leverage slider.

By default, all traders start in isolated margin mode.

MEXC currently allows traders to change from isolated margin to cross margin mode in the middle of a trade, but in the opposite direction.
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Step 8:

You may buy/go long on a position or sell/go short a position.

A trader goes long when they anticipate a price increase in a contract, purchasing at a lower price and selling it for a profit in the future.

A trader goes short when they anticipate a price decrease, selling at a higher price in the present and earning the difference when they re-purchase the contract in the future.

MEXC supports a variety of different order types to accommodate different trading strategies. We will next proceed to explain the different order types available.

 
Order
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Limit order


Users can set a price that they are willing to buy or sell at, and that order is then filled at that price or better. Traders use this order type when price is prioritised over speed. If the trade order is matched immediately against an order already on the order book, it removes liquidity and the taker fee applies. If the trader’s order is not matched immediately against an order already on the order book, it adds liquidity and the maker fee applies.

Market order

A market order is an order to be executed immediately at current market prices. Traders use this order type when speed is prioritised over speed. The market order can guarantee the execution of orders but the execution price may fluctuate based on market conditions.

Stop Limit Order

A Limit Order will be placed when the market reaches the Trigger Price. This can be used to stop loss or take profit.

Stop Market order

A stop market order is an order that can be used to take profits or stop losses. They become live when the market price of a product reaches a designated stop-order price and is then executed as a market order.

Order Fulfilment:

Orders are either fully filled at the order price (or better) or completely cancelled. Partial transactions are not allowed.

If you need to perform some basic arithmetic when trading, you may use the provided calculator function on the MEXC platform.
Coin Margined Perpetual Contact Trading (Futures) om MEXC Coin Margined Perpetual Contact Trading (Futures) om MEXC

MEXC Coin-Margined Perpetual Contract Trading Modes


1. Holding Long and Short Positions Simultaneously

MEXC provides users with both USDT-based swaps and coin-based swaps. Users may hold both long and short positions on a single contract at the same time. Leverage for both these long and short positions are calculated separately. For each contract, all the long positions are integrated, as are all the short positions. When users have both long and short positions, both positions will require separate margin amounts based on risk limit levels.

For example, while trading the BTC/USDT perpetual contract, users can open 25X long positions and 50X short positions at the same time.

2.Isolated Margin mode and Cross Margin mode

In cross margin mode, all balance of a type of cryptocurrency in an account can be utilised as margin to help avoid liquidation of a position denominated in that specific cryptocurrency. When required, a position will draw more margin from the total account balance of the specific cryptocurrency to avoid liquidation.

In isolated margin mode, margin added to a position is limited to a certain amount. Traders can add or remove margin manually but if the margin falls below the maintenance level, their position will be liquidated. Therefore, a trader’s maximum potential loss is limited to the initial margin. Traders may modify their leverage multipliers in both long and short positions but do note that higher multipliers imply increased risk. When in isolated margin mode, traders may adjust their leverage multiplier for both their long and short positions.

MEXC supports switching from isolated margin mode to cross margin mode but not vice versa.
 

Liquidation Risk limits of Coin-Margined Perpetual Contracts


Liquidation

Liquidation refers to the closing of a trader’s position when they are unable to maintain minimum margin requirements.
 

1. Liquidation is based on fair price

MXC uses fair price marking to avoid liquidation due to market manipulation or illiquidity.
 

2. Risk Limits: Higher margin requirements for bigger positions

This gives the liquidation system more usable margin to effectively close large positions that would otherwise be difficult to safely close. Larger positions are incrementally liquidated if possible.

If a liquidation is triggered, MXC will cancel any open orders on the current contract in an attempt to free up margin and maintain the position. Orders on other contracts will still remain open.

MXC employs a partial liquidation process involving automatic reduction of maintenance margin in an attempt to avoid a full liquidation of a trader’s position.


3. Traders on the Lowest Risk Limit Tiers

MXC cancels their open orders in the contract.

If this does not satisfy the maintenance margin requirement then their position will be liquidated by the liquidation engine at the bankruptcy price.

Here are some example liquidation calculations. Please note that fees are not included.
 

USDT Swap Liquidation Price Calculation

i) Liquidation price calculation in isolated margin mode

In this mode, traders may manually add margin.

Liquidation condition: Position margin + floating PnL = maintenance margin

Long position: Liquidation price = (maintenance margin - position margin + avg.price * amount * face value) / (amount * face value)

Short position: Liquidation price = (avg.price * amount * face value - maintenance margin + position margin) / (amount * face value)

A user buys 10000 cont BTC/USDT perpetual swap contracts at the price of 8000 USDT with 25X initial leverage.

The maintenance margin of the long position is 8000 * 10000 * 0.0001 * 0.5%=40 USDT;

Position margin = 8000 * 10000 * 0.0001 / 25 = 320 USDT;

The liquidation price of that contract can be calculated as follows:

(40 - 320 + 8000 * 10000 * 0.0001)/(10000 * 0.0001)~= 7720

 
ii) The liquidation price calculation in cross margin mode

All available balance of the specific cryptocurrency that a contract is denominated in can be used as position margin in cross margin mode. Losing cross positions cannot be used as position margin for other positions in cross margin mode.
 

Inverse Swap Liquidation Calculation

i) Liquidation price calculation in isolated margin mode

In this mode, traders may manually add margin.

Liquidation condition: Position margin + floating PnL = maintenance margin

Long position: Liquidation price = (avg.price * face value) / (amount * face value + avg.price (position margin - maintenance margin)

Short position: Liquidation price = avg.price * amount * face value / avg.price * (maintenance margin-position margin) + amount * face value

A user buys 10000 cont BTC/USDT perpetual swap contracts at the price of 8000 USDT with 25X initial leverage.

The maintenance margin of the long position is 10000 * 1 / 8000 * 0.5% = 0.00625 BTC.

Position margin = 10000 * 1 / 25 * 80000 = 0.05 BTC

The liquidation price of that contract can be calculated as follows:

(8000 * 10000 * 1)/ [10000 * 1 + 8000 * (0.05-0.00625)] ~= 7729


ii) Liquidation price calculation in cross margin mode

All available balance of the specific cryptocurrency that a contract is denominated in can be used as position margin in cross margin mode. Losing cross positions cannot be used as position margin for other positions in cross margin mode.


Risk limit explanation

Risk Limits: When a large position is liquidated, it may cause violent price fluctuations, and result in auto-deleveraging of traders who have taken up an opposing position because the size of the liquidated position exceeds the existing liquidity of the market.

To reduce market impact and the traders affected by liquidation events, MEXC has implemented a risk limiting mechanism, which requires large positions to provide increased initial and maintenance margins. This way, when a large position is liquidated, the probability of widespread auto-deleveraging is reduced, which prevents a chain of market liquidations.
 

Dynamic risk limit

Each contract has a base risk limit and a step. These parameters, combined with the base maintenance and initial margin requirements, are used to calculate the full margin requirement for each position.

As the position size increases, the maintenance margin and initial margin requirements will also increase. As the risk limit changes, so too will the margin requirements. .

The risk limit level of the current contract can be calculated as follows:

Risk limit level [Rounded up] = 1 + (position value + unfilled order value - base risk limit) / step


Risk Limit Formula:
Coin Margined Perpetual Contact Trading (Futures) om MEXC
The risk limit of each contract can be accessed in the “Risk Limit” section from your wallet.

Auto-Deleveraging(ADL) of Coin-margined Perpetual Contract

When a trader’s position is liquidated, the position is taken over by MEXCs Contract liquidation system. If the liquidation cannot be filled by the time the mark price reaches the bankruptcy price, the ADL system automatically deleverages opposing traders’ positions by profit and leverage priority.


Reducing Positions:

The price at which a traders’ positions are closed out is the bankruptcy price of the initial liquidated order.

Deleveraging priority is based on a trader’s profits and effective leverage used. This means that traders who are highly leveraged and making more profits will be deleveraged first. The system reduces positions by longs and shorts, ranking them from highest to lowest.


ADL Indicator

The ADL indicator displays a trader’s position-specific risk of being deleveraged. It increases in 20% increments. When all the indicators lighten up, it means that a trader’s position is at a high risk of being deleveraged. In the event of a liquidation that is unable to be fully absorbed by the market, deleveraging will occur.
 

Priority Ranking Calculation:

Ranking (if PNL percentage 0) = PNL Percentage * Effective Leverage       

Ranking (if PNL percentage
where

  Effective Leverage = |(Mark Value)| / (Mark Value - Bankrupt Value)

  PNL percentage = (Mark Value - Avg Entry Value) / abs(Avg Entry Value)

  Mark Value = Position Value at Mark Price

  Bankrupt Value = Position Value at Bankruptcy Price

  Avg Entry Value = Position Value at Average Entry Price

 

Margins Profit and Loss Calculations (Coin-Margined Perpetual Contracts)

MEXC offers two kinds of contracts: the USDT Contract and the Inverse Contract. The USDT contract is quoted in USDT and settled in USDT while the Inverse Contract is quoted in USDT and settled in BTC. This article will focus on how margin and PnL is computed in these two contract types.

1. Margins Explained

Margin refers to the cost of entering a leveraged position.

Successful trading with leverage requires an understanding of the following concepts:

Starting Margin: This minimum margin required to open a position. Your starting margin is dependent on margin rate requirements.

Maintenance Margin: The minimum margin requirement for maintaining a position below which additional funds will have to be deposited or forced liquidation may occur.

Opening Cost: The total amount of funds required to open a position, including the initial margin for opening a position and transaction fees.

Actual leverage: The current position includes the leverage ratio of unrealized gains and losses.

 
2. Margin calculation

In perpetual contracts, the order cost is the margin required to open a position. The actual cost is determined by whether the order is executed by a maker or taker because varying fees apply.

The general formula is as follows:

Inverse contract: Order cost (margin) = Position total * face value / (leverage multiplier * position avg. price)

USDT contract: Order cost (margin) = position avg. price * position total * face value / leverage multiplier

What follows are a series of examples that will provide more clarity on margin required when opening a position in USDT/Inverse Contracts.

 
Inverse Contract

If a trader wants to purchase 10,000 cont. BTC/USDT perpetual contracts at the price of $7,000 with a leverage multiplier of 25, and the face value of the contract is 1 USDT, then the margin required = 10000x1/ (7000x25 ) = 0.0571BTC;

 
USDT Contract

If a trader wants to purchase 10,000 cont. BTC/USDT perpetual contract at the price of $7,000 with leverage multiplier of 25, and the face value of the contract is 0.0001BTC, then the margin required = 10000x1x7000/25= 280 USDT;

 
3. PnL Calculation

PnL calculation includes fee income or expenditure, funding fee income or expenditure, and PnL upon closing a position.

 
Fee

The expenditure of taker  = Position value* Taker fee rate

The income of the maker = Position value* Maker fee rate

 
Funding fee

According to the negative or positive funding fee rate and the long or short position held, the trader will pay or receive funding fee.

Funding fee = Funding fee rate* position value

 
Closing PnL:

USDT Contract

Long position = (closing price - opening avg. price)* position total* face value

Short position= (opening avg. price - closing price)* position total* face value

Inverse contract

Long position = (1/opening avg. price - 1/closing avg. price)* position total* face value

Short position = (1/closing avg. price - 1/opening avg. price)* position total* face value

 
Floating PnL

USDT contract

Long position = (fair price - opening avg. price)* position total* face value

Long position = (opening avg. price - fair price)* position total* face value

Inverse Contract

Long position = (1/opening avg. price - 1/fair price)* position total* face value

Short position = (1/fair price - 1/opening avg. price)* position total* face value

 
For example, a trader purchases 10,000 cont. long for BTC/USDT perpetual contract at the price of $7,000 as a taker. If the taker fee is 0.05%, the maker fee is -0.05% and the funding fee rate is -0.025%, then the trader shall pay a taker fee of:

7000*10000*0.0001*0.05% = 3.5USDT

and the trader pays a funding fee of:

7000*10000*0.0001*-0.025% = -1.75USDT

In this situation, the negative value means that the trader receives the funding fee instead.

When said trader closes 10,000 cont. BTC/USDT perpetual contract at $8,000, then the closing PnL is:

(8000-7000) *10000*0.0001 = 1000 USDT

And the closing fee can be calculated as follows:

8000*10000*0.0001*-0.05%=-4 USDT

In this situation, the negative value means that the trader receives the funding fee instead.

The total PnL of the trader is therefore:

Closing PnL - Maker Fee - Funding Fee - Taker Fee

1000 - (-4) - (-1.75) -3.5 = 1002.25

Order Types (Coin-Margined Perpetual Contracts)


MEXC provides several order types.

Limit order

Users can set a price that they are willing to buy or sell at, and that order is then filled at that price or better. Traders use this order type when price is prioritised over speed. If the trade order is matched immediately against an order already on the order book, it removes liquidity and the taker fee applies. If the trader’s order is not matched immediately against an order already on the order book, it adds liquidity and the maker fee applies.
 

Market order

A market order is an order to be executed immediately at current market prices. Traders use this order type when speed is prioritised over speed. The market order can guarantee the execution of orders but the execution price may fluctuate based on market conditions.

 
Stop Limit Order

A Limit Order will be placed when the market reaches the Trigger Price. This can be used to stop loss or take profit.

 
Stop Market order

A stop market order is an order that can be used to take profits or stop losses. They become live when the market price of a product reaches a designated stop-order price and is then executed as a market order.

For example, a trader who buys over 2,000 long positions at the price of $8000 would like to take their profits when the price reaches $9000 and cut their losses when the price reaches $7500. They can then place two stop market orders, which will be automatically triggered at the market price the moment the $9,000 preconditions are met.

The stop market order may result in some slippage but it will ensure that the order is always filled.

 
Trigger-Limit Order

A trigger-limit order is an order type that automatically converts limit orders into an order based on market conditions. Unlike a market order or a limit order, the trigger-limit order will not be directly executed, but only be realized when the trigger condition takes effect. This means that the maker fee will apply.

The advantage of trigger-limit orders may limit slippage but there is a possibility that some orders will never complete because the market price of the product first has to meet the preconditions set by the trader and also fulfill the limit order price.

 
Fill-or-Kill (FOK)

If the order cannot be executed in full at the specified price, the remaining portion of the order will be cancelled. Partial transactions are not allowed.


Fair Price (Coin-Margined Perpetual Contract)


Why does MEXC employ fair prices to calculate the PnL and liquidation?

Forced liquidation is often a trader’s biggest concern. MEXCs perpetual contracts use a uniquely designed, fair price marking system to avoid unnecessary liquidation on highly leveraged products. Without this system, the mark price may deviate greatly from the price index due to market manipulation or illiquidity, resulting in unnecessary liquidation. The system therefore uses a calculated fair price instead of the latest transaction price, thereby avoiding unnecessary liquidation.

 
Fair Price Marking Mechanics

A perpetual contract’s fair price is calculated with the capital cost basis rate:

Funding fee basis rate = fund rate * (time till the next payment of funds / time interval of funds)
Fair price = Index price * (1 + capital cost basis rate)

All automatic deleveraging contracts use a fair price marking method, which only affects the liquidation price and unrealized profit, and not the realized profit.
 

Note: This means that when your order is executed, you may immediately see positive or negative unrealized gains and losses because of a slight deviation between the fair price and the transaction price. This is normal and does not mean that you have lost money. However, do pay attention to your starting price and avoid premature liquidation.


Fair Price Calculation of Perpetual Contracts

The Fair Price for a Perpetual Contract is calculated with the Funding Basis rate:

Funding Basis = Funding Rate * (Time Until Funding / Funding Interval)

Fair Price= Index Price * (1+Funding Basis)
 

Feature: Auto-Margin Increase


1. About auto-margin addition:

The auto-margin addition feature provides a mechanism for traders to prevent liquidation. When the auto-margin addition feature is enabled, margin will be automatically added from your balance currency to a position that is on the verge of liquidation. The position is then recovered to the initial margin rate.

If the available balance is insufficient, the system will proceed to cancel the users open orders to release some margin before proceeding with the addition of margin from the available balance.

 
2. Auto-margin addition formula:

(1) USDT-margined contract:

(position margin + added margin each time + floated PnL) / (fair price * amount * face value) = 1/initial leverages auto-margin-addition amount each time = (fair price * amount * face value) / leverage - floated PnL - position margin.

 
(2) Coin-margined contract:

(position margin + added margin each time + floated PnL) * fair price / (amount * face value) = 1/initial leverages auto-margin-addition amount each time = (mount * face value) / (leverage * fair price) - floated PnL - position margin

Initial margin rate = 1/ initial leverage

 
3. Example:

Trader A opens 5,000 contract for a BTC_USDT perpetual contract at the price of 18,000 USDT with 10x leverage. The estimated liquidation price is 16,288.98 USDT and the available balance in their contract account is 1,000 USDT.

If the fair price reaches the liquidation price (16,288.98 USDT), auto-margin addition will kick in to protect the position. Based on the formula above, the added margin amount shall be 764.56 USDT. Once the additional funds have been injected, the liquidation price will be recalculated and in this case, lowered to 14,758.93 USDT.

If the fair price reaches the liquidation price again, the auto-margin addition feature will be triggered once again. If the trader’s balance is insufficient for the auto-margin addition, the user’s open options will be cancelled before the funds are injected. If the trader has sufficient balance, margin will be added and the liquidation price will be calculated accordingly.

Do note that the auto-margin addition feature is only valid in isolated-margin mode, and not cross-margin mode.
 

Tiered Fee Rate (Coin-Margined Perpetual Contract)

In order to reduce transaction fees, provide a better trading experience and reward active traders, MEXC Futures will implement a tiered fee rate starting at 00:00 (UTC+8) on October 15, 2020. The details are as follows:
Coin Margined Perpetual Contact Trading (Futures) om MEXC
Note:
  1. Trading volume= opening + closing (all contract types).
  2. Trader level is updated every day at 0:00hrs according to the users Futures account wallet balance or the users 30-day trading volume. The update time may be slightly delayed.
  3. When the contract fee rate is 0 or negative, the contract fee discount will not be used.
  4. Market makers are not entitled to this discount.
 

FAQ for Coin-margined Perpetual Contract


1. What is a perpetual contract?

A perpetual contract is a product which can be traded like a traditional futures contract but never expires.This means you can hold a position for as long as you like. Perpetual Contracts track the underlying Index Price through the use of periodic payments between buyers and sellers of the contract known as Funding.

 
2. What is the mark price?

Perpetual contracts are marked according to fair price marking. The mark price determines unrealised PnL and liquidations.

 
3. How much leverage can I use with a MEXC perpetual contract?

The amount of leverage offered by a MEXC perpetual contract varies by product. Leverage is determined by your initial margin and maintenance margin levels. These levels specify the minimum margin you must hold in your account to enter and maintain your position. Your allowed leverage is not a fixed multiplier but a minimum margin requirement.

 
4. What are your trading fees like?

The current trading fee rate for all perpetual contracts on MEXC is 0.02% (Maker) and 0.06% (Taker).

 
5. How can I check the funding rate?

Traders can check the current market funding rate in the “Funding Rate” section under the “Futures” tab.

You may also take a look at the historical funding rate through the funding rate history page.

 
6. How do I calculate my contract PnL?

PnL calculation (Closing Positions):

i) Swap (USDT)

Long position = (Average Price at which position is closed - Average Price at which position was opened) * number of positions held * face value

Short position = (Average price at which position was opened - Average Price at which position was closed) * number of positions held * face value

ii) Inverse Swap (Coin-Margined)

Long position = (1/Average Price at which position is closed - 1/Average Price at which position was opened) * number of positions held * face value

Short position = (1/Average price at which position was opened - 1/Average Price at which position was closed) * number of positions held * face value

 
Floating PnL:

i) Swap (USDT)

Long position = (Fair Price - Average Price at which position was opened) * number of positions held * face value

Short position = (Average price at which position was opened - Fair Price) * number of positions held * face value


ii) Inverse Swap (Coin-Margined)

Long position = (1/Fair Price - 1/Average Price at which position was opened) * number of positions held * face value

Short position = (1/Average price at which position was opened - 1/Fair Price) * number of positions held * face value
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