# Futures

I. About Liquidation  MEXC uses the fair price to prevent liquidation due to illiquidity or market manipulation. Your liquidation price and unrealized PNL will be calculated using the fair price.    Liquidation in Isolated Margin Mode  Position Margin + Unrealized P&L ≤ Maintenance Margin + Liquidation Fees  When the margin rate = 100%, liquidation will be triggered.  Liquidation in Cross Margin Mode  Equity in cross margin account (excluding margin and unrealized PNL in isolated margin mode, and all order margin) ≤ Maintenance Margin + Liquidation Fees  When the margin rate = 100%, liquidation will be triggered.  Liquidation Process  In the event that liquidation is triggered, the system will perform a partial liquidation process in an attempt to avoid a full liquidation of a trader’s position based on the trader’s risk tier.    Canceling an order: In cross margin mode, all current orders will be canceled. In isolated margin mode, if automatic margin call is enabled, all current Futures orders will be canceled. If the margin rate is still greater than 100% after the cancellation, the system will proceed to the next step.Long/short self-dealing: Self-deal forced position reduction of cross margin positions in hedged mode (only for cross margin mode). If the margin rate is still greater than or equal to 100%, the system will continue to the next step.Partial liquidation: If the user's position is at the lowest risk tier, the system will proceed to the next step directly. If tier is greater than the 1st tier, the tier needs to be lowered first, i.e., part of the positions at the current tier will be taken over by the forced liquidation mechanism and liquidated at the bankruptcy price so as to reduce the risk limit tier. The maintenance margin rate is then calculated using the maintenance margin after the reduction to see if it is greater than or equal to 100%. If the conditions for liquidation are still met, the positions will be reduced again until it reaches the lowest tier.Forced liquidation: If the position is at the lowest tier but the margin rate is greater than or equal to 100%, the remaining position will be taken over by the forced liquidation mechanism and liquidated at the bankruptcy price. (The takeover process does not go through the aggregation system so the bankruptcy price will not be displayed on the market transaction record and K-line.)  Process after positions are taken over by the forced liquidation mechanism:  When a user’s position is taken over by the forced liquidation mechanism at the bankruptcy price, if the position can be executed in the market at a better price, the remaining margin will be added to the insurance fund.If the position cannot be executed at a price better than the bankruptcy price, the loss will be covered by the insurance fund. Eventually, if the insurance fund is not sufficient to cover the loss of the liquidated position, the position will be taken over by the auto-deleveraging system.    Calculation of Liquidation Price  (1) Liquidation Price (isolated margin mode, users can manually add margin)  Liquidation condition: Position Margin + unrealized P&L ≤ Maintenance Margin + Liquidation Fees  When the margin rate = 100%, liquidation will be triggered and the price of the forced liquidation is derived from the equation. (In the example below, liquidation fees will be omitted in the calculation process.)  Long: Liquidation Price = (Maintenance Margin – Position Margin + Averaging opening price * Quantity * Position size) / (Quantity * Position size)  Short: Liquidation Price = (Averaging opening price * Quantity * Position size - Maintenance Margin + Position Margin) / (Quantity * Position size)     A user buys in 10,000 cont. of BTC/USDT perpetual futures at 8,000 USDT with an initial leverage multiple of 25x in a long position. (Assume the position of 10,000 cont. is at 1st tier of risk limit with a maintenance margin rate of 0.5%.)  Maintenance Margin = 8000x10000x0.0001x0.5%=40USDT;  Position Margin = 8000x10000x0.0001/25=320USDT;  Calculate the user’s liquidation price:  Liquidation Price for the Long position =（40-320+8000x10000x0.0001）/（10000x0.0001）=7720  *In isolated margin mode, users can manually increase the margin of the position to widen the gap it has from the opening price. This will give them a better liquidation price. Hence, users can manually increase the margin to lower the risk of the position when risk limit is high.    (2) Liquidation Price (cross margin mode)  Liquidation condition: Equity in cross margin account (excluding margin and unrealized PNL in isolated margin mode, and all order margin) ≤ Maintenance Margin + Liquidation Fees  When the margin rate = 100%, liquidation will be triggered and the price of the forced liquidation is derived from the equation. (In the example below, liquidation fees will be omitted in the calculation process.)  Forced Liquidation Price = (Average Short Position Opening Price * Short Position Quantity * Position size – Average Long Position Opening Price * Long Position Quantity * Position size – Cross Margin Position Maintenance Margin + (Wallet Balance – Position Margin in Isolated Margin Mode – Order Margin + Unrealized PNL of other futures positions in cross margin mode) / (Short Position Quantity * Position size – Long Position Quantity * Position size)  A user buys in 10,000 cont. of BTCUSDT perpetual futures at 8,000 USDT with an initial leverage multiple of 25x, and their wallet balance is 500 USDT. Note that this is the user’s only long position in cross margin mode, and there are no other positions in isolated margin mode or pending orders. (Assume the position of the 10,000 cont. is at 1st tier of risk limit with a maintenance margin of 0.5%.)  Position Maintenance Margin in Cross Margin Mode = 8,000 x 10,000 x 0.0001 x 0.5% = 40 USDT;  The forced liquidation price can be calculated as below:  Forced Liquidation Price =（0 * 0 * 0.0001 – 8,000 x 10,000 x 0.0001 – 40 +（500 – 0 – 0 + 0））/（0 * 0.0001 – 10000 x 0.0001）= 7,540 USDT  *Different from isolated margin mode, the liquidation price in cross margin mode may change from time to time as the margin might be affected by positions of other trading pairs. In cross margin mode, the initial margin of every position is independent, but the margin is shared. The unrealized PNL of each position may affect the cross margin account equity. When there are multiple cross margin positions in both long and short positions under the same futures, the liquidation price for the two positions will be the same.    II. About Risk Limit  In a highly volatile trading environment, a trader holding a large position with high leverage will likely incur the significant risk of deficit loss. If the insurance fund is depleted, the auto-deleveraging system may be triggered, creating additional risk for other traders. Therefore, the risk limit mechanism is applied to all trading accounts in MEXC. The system uses a tiered margin model for risk control and the leverage multiple depends on the size of the position. The larger the position, the lower the available leverage multiple. Users may adjust the leverage multiple themselves. The initial margin rate is calculated based on the leverage multiple adjusted by the user.  Position Limit, Maximum Leverage, and Initial margin rate  Before opening a position, users are required to adjust the leverage multiple. If the user did not adjust the leverage, the MEXC default leverage multiple of 20x will be applied. However, users can still adjust the multiple. The leverage multiple determines the position limit, where the higher the leverage multiple, the lower the position limit.  When the user adjusts the leverage multiple, an alert regarding the position limit will pop out as shown below:     Maintenance margin rate  The maintenance margin rate is not calculated based on the user's adjusted leverage multiple, but the user's position size, which means that the maintenance margin rate is not affected by the leverage multiple. The system divides the position amount into several tiers according to the basic risk limit and incremental amount of the futures. Different maintenance margin rates are applied to different tiers, where the larger the position amount, the higher the maintenance margin rate. (For risk limit details of each futures, kindly check Risk Limit under Futures Information.)  The liquidation price is affected directly by the maintenance margin. Therefore, to avoid liquidation, we strongly recommend users to close their positions before the margin balance drops to the maintenance margin level.  Please note that under abnormal price fluctuations and volatile market conditions, the system will take additional measures to maintain market stability, including but not limited to:  Adjustment of maximum leverageAdjustment of position limits for different tiersAdjustment of maintenance margin rate of different tiers    Examples of Risk Limit Mechanism  Using BTCUSDT perpetual futures as an example:   Tier  Maximum Leverage  Holding Positions  Maintenance Margin Rate  1  200x  0～525,000 cont.  0.4%  2  111x  525,000～1,050,000 cont.  0.8%  3  76x  1,050,000～1,575,000 cont.  1.2%  4  58x  1,575,000～2,100,000 cont.  1.6%  5  47x  2,100,000～2,625,000 cont.  2%   Assume the risk limit tiers for BTCUSDT perpetual futures are as shown above. (The figures shown are only an example. To find the actual figures, kindly refer to the risk limit tiers of respective futures.):  (1) Leverage multiple determines the user’s position limit  When the leverage is adjusted to 200x, it corresponds to the 1st tier of risk limit. The user’s position limit at this time would be 525,000 cont. (including no. of contracts the user is already holding and unfilled open orders).  When the user's leverage is adjusted to 50x, it corresponds to the 4th tier of risk limit (47 < user’s leverage ≤ 58). The user’s position limit at this time would be 2,100,000 cont. (including no. of contracts the user is already holding and unfilled open orders).  (2) Maintenance margin rate at different tiers based on position size  User A buys in 80,000 cont. of BTCUSDT perpetual futures at 10,000 USDT with a leverage multiple of 50x. At this point, the user holds 80,000 cont., which corresponds to the 1st tier of risk limit (no. of open positions: 0 - 100,000 cont.). Hence the user’s position's maintenance margin rate at this point is 0.5%.  Later on, as the price of BTCUSDT perpetual futures rises, User A continues to buy in 40,000 cont., meaning the user is holding 120,000 cont. now. This corresponds to the 2nd tier of risk limit (no. of open positions: 100,000 - 200,000 cont.). Hence the position maintenance margin rate is 1%.  At this point, if the user’s position is under liquidation risk, liquidation will be triggered. As it is in the higher tier, liquidation by tier will be activated. Position of 20,000 cont. will be liquidated first, lowering the no. of open positions to 100,000 cont. This will lower the risk limit from the 2nd tier to 1st tier and the maintenance margin rate from 1% to 0.5%. The condition of the remaining positions will be monitored and the remaining positions will be liquidated if they remain under liquidation risk. If not, the positions will be kept.    Find us on  Chinese Telegram:https://t.me/MEXC_ZH  Chinese Twitter:https://twitter.com/mexczh  English Telegram:https://t.me/MEXCEnglish  English Futures Telegram:https://t.me/MEXCFutures  English Twitter:https://twitter.com/MEXC_Global  English Futures Twitter:https://twitter.com/MEXCDerivatives  Facebook:https://www.facebook.com/mexcglobal  Instagram:https://www.instagram.com/mexcglobal/  Medium:https://medium.com/mexcglobal  Discord:https://discord.gg/agZNfksc2T    Buy USDT now：https://otc.mexc.com/  Create your own referral link today and start inviting friends to enjoy great rebates:https://www.mexc.com/invite    Enjoy trading on MEXC.  The MEXC Team 

1. Login   Visit MEXC official website https://www.mexc.com and select [Futures Markets] under the [Derivatives] menu to do real contract trading.      2. Please learn the swap interface carefully.It mainly includes contract information, trading pairs, price information, position and order information, depth picture and limit / stop-limit order window.  3. Trading  (1) MEXC Swap includes USDT swap and inverse swap. USDT swap takes USDT as margin, while inverse swap takes the corresponding cryptocurrency as margin. Users can trade either of them according to demand.   (2) Asset Transfer. If the contract balance is insufficient, users can transfer the asset from the spot account to the contract account. If there’s insufficient balance in the spot account, users can deposit or do OTC trading.  (3) Place an order at the order window and click [Buy] or [Sell].      4. Leverage   MEXC Futures provides 1 - 125x leverage. The leverage multiplier is different based on the specific product. The leverage multiplier is determined by the initial margin and maintenance margin, and the leverage multiplier determines the minimum asset required to open or maintain a position. You can check the minimum initial margin and maintenance margin required for all contract products here.   **MEXC Swap now supports users to modify leverage multiplier in both long and short directions under isolated margin mode.  [How to modify multiplier]  For example, the leverage multiplier for a user’s long position is 20X, and the short position is 100X. To lower hedging risks, the user wants to adjust the 100x short position to 20x.  Click [Short 100x] and adjust the leverage multiplier you prefer. Here we adjust it to 20X and click [Confirm].    After adjustment, the leverage multiplier for the short position turns to 20X.   5.  Cross margin  The cross margin refers to the use of all available balances in the account as margin to avoid forced liquidation. Any other position that has achieved profit can also be margin for losing positions.  The cross margin includes the initial margin and available balance of the contract account, and the losing balance will not be margin to other cross positions. MEXC contract now supports the adjustment from isolated margin to cross margin, but not from cross margin to isolated margin.  6. Isolated Margin  Under isolated margin mode, even if the position is liquidated, the maximum loss will only be the position’s initial margin and the added margin. The available balance will not be used as a margin. Therefore, if the investing strategy is wrong, isolated margin mode will limit your loss.   Users can add margin manually to increase/decrease the liquidation price. If a user adjusts the leverage multiplier after adding margin, the margin added will be reset.  *By default, Futures is under isolated margin mode. Click [Cross] to turn the contract into cross margin mode.   *MEXC contract now support the adjustment from isolated margin mode to cross margin mode, but not vice versa.   [How to adjust?]  MEXC Contract supports users to adjust leverage multiplier in either long or short direction simultaneously. Users can adjust to any leverage multipliers under the isolated margin mode.   For example, if a user holds 20x long for BTC/USDT swap in isolated mode, and he wants to adjust the isolated mode into cross margin mode. He can first click [Long 20x], and then [Cross], at last [Confirm].   7. Open Long/Short  (1) Open long  If the trader judges that the market price will rise in the future, he can buy long of the contract. Buy/long is actually buying the contract at the right price, waiting for the market price to rise and then selling (close position) to earn the difference, similar to the spot transaction, referred to as "buy first and then sell".   (2) Open short  If the trader judges that the market price will fall in the future, he can sell short of the contract. Open short is actually selling the contract at the right price, waiting for the market price to fall and then buying to earn the difference, referred to as “sell first and then buy”.  8. Order type  MEXC Contract supports various order types to satisfy the trading demand of different users.   1. Limit order  Users can place an order at a limit price, and the order will be filled if the market price reaches the limit price.  2. Best Bid and Offer (BBO)  Users do not need to set a price, and orders will be filled instantly at the best market price at the time.  3. Trigger-limit  There's "Trigger Price" and "Price". When the market price meets the "Trigger Price", the system will put the order at the "Price", which is the limit price.  4. Post Only  Post Only means that the orders placed by the users will not be filled immediately. Hence, the users will always be the maker who can enjoy the benefits as liquidity providers.  5. Immediately or cancel (IOC)  The limit has to be filled completely at the limit price. If not, the order will be cancelled. It cannot be partially filled.  6. Market-to-Limit (MTL)The order will be filled at the best price and the unfilled order will be converted into a limit order.  7. Set Stop-Limit   MEXC Futures supports setting Take-profit and Stop-loss prices at the same time. Take short BTCUSDT as an example, open a short position at the price of 10,300 USDT, fill in the Take-profit price at 10200, the Stop-loss price at 10400, and click on [Short] to set both Take-profit and Stop-loss prices.     What are the advantages of Futures