Q7: How is the liquidation price calculated? Where do you check the liquidation price?
A liquidation is triggered when:
Collateral = Initial Margin + Realized PNL + Unrealized PNL < Maintenance Margin
On the position, you can easily find the "Liquidation Price".
KuCoin Futures adopts a sophisticated risk engine and liquidation model, you can find more details about the calculation of liquidation price in this tutorial.
Q8: Why does the leverage of position keeps changing?
To timely show the position PNL, the leverage being displayed is the actual leverage which will be affected by the floating PNL of the position.
To be specific, when the floating PNL (namely, the unrealized PNL) is positive, the system will lower the actual leverage. However, when the floating PNL (namely, the unrealized PNL) is negative, the system will raise the actual leverage.
Calculation of leverage: Leverage = Position value / Margin
Calculation of floating leverage: Floating leverage = Position value / Margin pool
Please note, Margin pool includes Margin and Unrealized PNL.
E.g.:
A. When user A earns profit, the unrealized PNLwill be positive. With the growthof PNL, the margin pool will become greater as well, which means the denominator of the formula becomes larger, and thus the leverage decreases.
B. When user B bears losses, the unrealizedPnLwill be negative. With the decrease of PNL, the margin pool will also reduce, which means the denominator of the formula becomes smaller, and thus the leverage increases.
The actual leverage of the position can be regarded as a barometer of the position risk. The higher the actual leverage is, the higher risk of liquidation would be and vice versa. If the leverage is high, please pay attention to the position risk. We highly recommend newbies to control the leverage within 5x.
Find more details in this tutorial:
Newbies Must Read 02: Actual Leverage - Key of Controlling Futures Trading Risks
Q9: When it says position PNL is that profit/loss added or subtracted to the original position?
There are two types of PNL:
1.Unrealised PNL is also called floating PNL, which is the profit and loss of your current positions calculated based on the price gap between the average entry price and the mark price. By default, the unrealised PNL will change with the mark price on KuCoin Futures.
2.Realised PNL is also the PNL of partially closed positions or reduced positions, including the position PNL, trading fees as well as funding fees associated with the trading. The position PNL is calculated based on the price gap between the entry price and the close price.
Q10: What’s the difference between Margin and Futures trading?
Here is a comparison chart below for reference:
|
Margin Vs. Futures Contracts on KuCoin |
||
|
|
Margin |
Futures |
|
Trading Direction |
Long/Short |
Long/Short |
|
Effectiveness & Utilization of Funds |
High |
Higher |
|
Market |
||
|
Open a position: Borrow funds and plance an order to trade |
Open a position: Place an order to trade |
|
|
Close a position: Sell/Buy to close and repay USDT & interest |
Close a position: Sell/Buy to close |
|
|
Repayment |
Yes |
No |
|
Max. Leverage |
10x |
100x |
|
0.10% |
0.02%-0.06% |
|
|
Interest |
Position PNL + Debt |
Only Position PNL |
|
No |
Quarterly No; Perpetual YES |
|
Q11: What is a Funding rate? How is it calculated?
The funding rate represents the difference between the price of the perpetual contract market and that of the Spot market. The larger the absolute value of the funding rate, the larger the difference between the two prices.
Funding can be calculated through the funding rate.
Calculation formula: Funding = Position value * Funding rate
Position Value = Lots x Mark Price x Multiplier
Calculation formula: Funding = Position value * Funding rate
Position Value = (Lots / Mark Price) x Multiplier
The funding will be settled at 20:00, 04:00, and 12:00 each day (UTC).
When the funding rate is positive, holders of long positions pay for those of short positions. When the funding rate is negative, then vice versa.
Investors can close their long positions before the time of settlement to avoid paying the funding. Funding is charged peer to peer between traders. Therefore KuCoin Futures will NOT charge any fees.
Q12: Can bots trade in Futures?
This feature has been officially launched already, and you can visit the ‘Trading Bot’ on the KuCoin App to find it. As shown below:
KuCoin Futures is offering bonus for newbies!
Enable Futures trading now to claim the bonus! Futures trading is a 100x magnifier of your profits! Try now to leverage more profits with less funds!
🎁 Bonus 1:
KuCoin Futures will airdrop bonus to all users! Enable futures trading now to claim up to 20 USDT of bonus for newbies only! Bonus can be used in Futures trading and profits generated from it can be transferred or withdrawn! For more details, please check KuCoin Futures Trial Fund.
🎁 Bonus 2:
Futures deduction coupon has been distributed to your account! Go claim it now! The deduction coupon can be used to deduct Futures trading fees of random amount. For more details, please check KuCoin Futures Deduction Coupon.
*How to Claim?
Tap into “Futures”---> “Deduction Coupon” in KuCoin app (or click here).
Tutorials:
Thank you for your support!
KuCoin Futures Team
Risk Warning: Please pay attention to the risk control of Futures trading. It is recommended that newbies control the leverage within 5x and set the Take Profit and Stop Loss on your position.
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