Contract target: The target of each currency perpetual contract is the corresponding currency index compiled and released by BitVenus. Currently, BitVenus supports forward perpetual contracts for BTC, ATOM, AXS, BCH, DOGE, DOT, EOS, ETC, FIL, ETH, LINK, LTC, MATIC, SOL, SUSHI, TRX, UNI, and XRP.
Marked price: The marked price is calculated using the fair price marking method for a continuing contract. The marked price determines the margin, unrealized profit and loss and strong parity of the position. Reasonable marked price is the market fair price calculated by referring to the spot price of the three major spot exchanges in real time and obtained after complex regression weighting calculation. Therefore, even BitVenus has no ability to influence the marked price, so that the real market determines the price and ensures fair and just contract trading.
Entrustment margin: Entrustment margin is the minimum USDT amount required by traders to successfully place an order.
Position margin: The amount of margin occupied by the trader's current position, the occupied margin is different from the entrusted margin. The entrusted margin is the minimum balance required for the order to be successfully released to the account on the market (the minimum condition for the order to be successfully sent to the market), and the position margin is the position opening. The actual cost to be paid after the opening (the actual occupied margin cost of the opened position order).
Maintenance Margin: Maintenance margin is the minimum amount of USDT required by a trader to maintain an existing position. If the margin balance in this position falls below the maintenance margin level, the position will be liquidated.
Leverage ratio: BitVenus provides different leverage levels for different products, and the maximum leverage can reach 125 times. Leverage is determined by the level of starting margin and maintaining position margin. They determine the minimum amount of money a trader needs to open and maintain a position. Leverage is not a fixed multiple, but a minimum margin requirement.
Full position:Full position means that all available balances in an account can be used as collateral to avoid forced liquidation. The advantage of this model is that, as long as leverage is moderate, the probability of a sell-off is low, so it is often used to hedge.
Isolated position: The isolated position mode means that the collateral asset allocated to a position is limited to a certain amount. If the collateral assets of the position are insufficient to support the floating loss, the position will be forced to close. Therefore, in the case of high volatility and large leverage, the isolated position model is easy to be forced to close the position, but the final loss is only the position collateral assets, and does not affect the account balance.
Note: BitVenus currently offers two types of leverage, cross margin leverage and isolated margin leverage. Cross-margin leverage is more suitable for institutions or experienced users as a hedging tool, while isolated leverage is more suitable for novice users to limit losses within a range.
Risk Limit: In order to reduce the risk of automatic position reduction for other users of the platform after users with huge positions are liquidated, the maintenance margin and initial margin requirements will also increase as the number of positions increases. The risk limit indicator will be used to alert the user to your current margin requirements. Each contract has a risk limit table, the more pieces the higher the maintenance margin rate and the initial margin rate.
Forced liquidation: Investors need to pay attention to the estimated liquidation price of the held position. When the mark price of the contract falls below the liquidation price of long positions or the liquidation price of short positions, the trader's margin ratio for maintaining positions will not be changed. If the requirements are met again, the positions held by the investor will be forced to close out, and the maintenance margin in the account may be lost. When a trader's position needs to be liquidated, the liquidation engine will attempt to liquidate the position at the prevailing market price. If the liquidation fails, the BitVenus liquidation insurance foundation will carry out follow-up processing.
Estimated strong parity: under multi position / short position, when the marked price of the current position contract is less than / greater than the strong parity price, your position will be temporarily taken over by the strong parity system.
Risk Rate of Full position : The position situation under the full position mode is more complex. In the full position mode, when you have multiple positions and the profits and losses of each position are unbalanced, the displayed strong parity will float in real time, so the strong parity under the full position mode can only be used as a micro concrete reference index. Therefore, in addition to referring to strong parity, you can also measure the overall situation of all positions in the current full position through the index of risk rate. When the risk degree reaches 100%, it will enter the strong leveling process. The detailed calculation formula of risk degree is = (full position maintenance margin + entrusted margin) / (account equity - full position unrealized profit - position by position margin).
Insurance Fund: BitVenus uses insurance funds to avoid traders' positions being automatically reduced. The increase in the amount in the insurance fund comes from the profits from liquidation orders that are traded at a price higher than the bankruptcy price in the market.
Automatic Position Reduction: The platform uses the automatic position reduction system to ensure that the closing orders of the insurance account can be completed in time. When the liquidation order cannot be filled in the market, automatic reduction will occur. Traders holding opposing positions will be closed out according to the priority of their leverage and profits, so as to clear the risk as soon as possible and avoid further expansion of losses.
Funding fee: Between the buyer and the seller three times a day, at 00:00 / 08:00 / 16:00 Hong Kong time. The specific proportion depends on the long and short positions in the daily market. If the funding rate is positive, the long position will pay the corresponding funding fee for the short position, and if the funding rate is negative, it means that the short position will pay the corresponding funding fee for the long position. Please note: Traders will only be required to pay or receive funding if they hold a position at the time the funding is settled.
Opening value: average opening price * number of sheets * single contract value
Position value: number of sheets * single contract value * marked price
Unrealized profit and loss: the current contract position held by the trader generates profit and loss, also known as floating profit and loss.
Realized profit and loss: the accumulated profit and loss generated by the trader's closed position before contract settlement.
Rate of return: = unrealized profit and loss / position margin.