KuCoin Futures Reminder: Manage Position Risks During Market Fluctuations

Recently, the cryptocurrency market prices have been highly volatile due to multiple factors. Controlling leverage effectively is key to managing position risks and avoiding forced liquidation. As the People's Exchange, KuCoin always prioritizes user interests. We recommend you use caution with high leverage futures during this period. If you are used to spot trading, we recommend trying 1-2x leverage futures. These are less likely to be liquidated and can still amplify your returns. In some countries and regions, futures trading is not considered as crypto trading.

 

High Leverage Futures: Small investment for large returns, significant amplification of position PNL, noticeable costs during trading and holding (such as trading fees and funding fees), higher probability of liquidation, and complete loss of principal if liquidated. Low Leverage Futures: Lower amplification of position PNL, relatively lower costs during trading and holding (such as trading fees and funding fees), and a smaller probability of liquidation.

 

Here are some examples to help you understand the features of spot trading, low leverage futures, and high leverage futures.

With BTC priced at $65,000, User A buys BTC spot, User B opens a 2x leveraged BTC-USDT perpetual contract, User C opens a 10x leveraged BTC-USDT perpetual contract, and User D opens a 100x leveraged BTC-USDT perpetual contract. Each user invests 1,000 USDT. Here are their trading fees, liquidation prices, and position quantities.

  User A User B User C User D
Initial Investment (USDT) 1,000   1,000   1,000 1,000  
Invested In Spot 2x Futures 10x Futures 100x Futures
Trading Fee (USDT) 1   1.2   6   60
Liquidation Price (USDT) Never Liquidated 32,760 58,760  64,610 
Position Quantity (BTC) 0.015 0.031 0.15 1.5

 

Scenario 1: When the BTC-USDT perpetual contract mark price reaches $70,000 at the funding rate settlement time with a funding rate of 0.01%, the unrealized PNL and funding fees for the four users are:

  User A User B User C User D
Initial Investment (USDT) 1,000   1,000 1,000   1,000  
Invested In Spot 2x Futures 10x Futures 100x Futures
Unrealized PNL (USDT) 75 150 750 7500
Funding Fee (USDT) 0 0.21 1.05 10.5

 

Scenario 2: If the BTC price drops to $64,610, User D's position will be liquidated, resulting in a loss of all 1,000 USDT. The unrealized PNL for the other three users will be:

  User A User B User C
Initial Investment (USDT) 1,000 1,000 1,000
Invested In Spot 2x Futures 10x Futures
Unrealized PNL (USDT) -5.85 -11.7 -58.5

 

Scenario 3: If the BTC price rises to $100,000, the remaining three users can still enjoy the benefits of the price increase. Their unrealized PNL will be:

  User A User B User C
Initial Investment (USDT) 1,000   1,000   1,000
Invested In Spot 2x Futures 10x Futures
Unrealized PNL (USDT) 525 1,050 5,250

 

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KuCoin Futures Trading Guide:
Website Tutorial
App Tutorial

 

Thank you for your support!
KuCoin Futures Team

 

Note: Users from restricted countries and regions cannot enable futures trading.

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