An Introduction to Inverse Futures Contracts

What is CoinEx Inverse Futures ContractsTrading
The Inverse Futures Contracts which is also called Coin-M Perpetual Contract on CoinEx is similar to a traditional Futures Contract, but it does not have an expiry or settlement date. The Spot Market Price is anchored in the mechanics of a funding component in a Contract. Contracts allow you to buy for long or sell for short based on your predictions about the future upside and downside of the prices.

The Comparison of Linear Futures Contracts and Inverse Futures Contracts

Contract Mechanisms
1. Fair Price: Futures contract employs Fair Price Marking that determines the unrealized profit or loss and liquidation on the position.
2. Initial Margin: The minimum amount of margin for position open.
3. Maintenance Margin: The minimum amount of margin required to keep your position open. The requirements of Maintenance Margin are tied to the Risk Limits.
4. Funding Rate: It makes the trading price close to the Spot Price. Periodic payments are exchanged between the buyer and seller every 8 hours. If the rate is positive, then longs will pay and shorts will receive the rate, and vice versa if the rate is negative. This rule only applies to positions open at the funding timestamps 24:00, 08:00, and 16:00 (UTC).
5. Contract Leverage: CoinEx futures contract employs several adjustable leverages ranging from 3X to 100X.
6. Cross Margin: The full amount of funds in the Available Balance will be utilized as margin on your position. When the Initial Margin is less than the Maintenance Margin, any Available Balance will be used to add margin to your position.
7. Isolated Margin: Initial Margin will be utilized for the current position only. It's the holder but not the engine who must add the margin.
8. Buy Long: If the trader judges that the market price will increase in the future, he can buy a certain number of contracts. Waiting for the market price to rise, and then sell (close the position) to earn the difference, referred to as "buy first and sell later".
9. Sell short: If a trader judges that the market price will fall in the future, he can sell a certain number of contracts. Waiting for the market price to fall, and then buy (close the position) to earn the difference, referred to as "sell first and buy later".
10. Liquidation Mechanism: In case of liquidation, partial liquidation, insurance funding and auto-deleveraging will be at work.

Trading Rules

Trading Hours: Round the clock, no limitation on the settlement date.

Order type: Short Sell, Long Buy, Long Sell for liquidation, and Short Buy for liquidation.

Position: Each contract has only one position at the same time: assuming you have successfully opened a short position, you cannot open a long position at the same time. If you buy long at this time, the current short position will be reduced. Besides, if the number of contracts bought exceeds the current short position, then the position will become a long one. However, if you sell short at this time, it will increase the current short position. As a result, you can’t be long and short a contract at the same time.

Contract Products: