Trading Rules of USDⓈ-Margined Contracts
- USDⓈ-margined Contracts guides
USDT-margined contract is available to trade for 24/7 around the clock. USDT-margined contracts are settled every 8 hours which take place in three periods: 00:00, 8:00 and 16:00 (UTC). While, weekly USDT-margined futures are delivered at 8:00 am (UTC) every Friday, and are allowed to close positions but not allowed to open positions in the last 10 minutes before the delivery.
During the settlement/delivery, USDT-margined contract trading will be suspended, and its resumption time depends on the system’s execution time.
The suspension and resumption time varies by the type of contract, that is to say, if the BTC/USDT contract is still being settled, while other contracts that have finished their settlements can resume trading first.
Trading types can be divided into opening and closing positions. Each type can be further divided into two directions, which are long and short:
Buy to open long: a user predicts a bullish market and places an order to buy a certain amount of a certain contract. The user will hold a long position when the order is filled.
Sell to close long: a user is not optimistic about the future market anymore, hence he sells some contracts to close the positions. The user’s long positions will be reduced based on the amount he sells after the order is filled.
Sell to open short: a user predicts a bearish market and places an order to sell a certain quantity of a certain contract. The user will hold a short position when the order is filled.
Buy to close short: a user is optimistic about the market now, therefore he closes short positions by buying the same contracts. The user’s short positions will be reduced based on the amount he buys after the order is filled.
Limit Order: Users need to specify the price and amount when placing an order. The Limit Order specifies the highest price that users are willing to buy or the lowest price that they are willing to sell. After users set the limit price, the market will prioritize the transaction at a price that is favorable to the user. Limit orders can be used to open and close positions. For Limit Order, three mechanisms are available to select, which are "Post only", "FOK (Fill or Kill)", "IOC (Immediate or Cancel)"; if no mechanism is selected, the limit order will be "always valid" in the market by default. Limit Order Operation Instruction＞＞＞
Trigger Order: when using Trigger Order, users can set trigger price, price and amount in advance. When last price reaches the trigger price, the system will place an order by using the price and amount set in advance just like limit order. Trading Guide of Trigger Order>>>
BBO (Best Bid Offer) Order: if a user selects BBO to place an order, the user is only required to enter the amount, and the system will take the last price of an opponent at the moment receiving this order (if the user is a buyer, the BBO price is the ask_one price; if the user is a seller, the BBO price is the bid_one price) to place an order.
Optimal N Order: using Optimal N Order means that the user can place an order based on BBO prices within the optimal N price. Users can select from “Optimal 5”, “Optimal 10” or “Optimal 20” and enter the amount to place an order. The Optimal N is available for both opening and closing positions, and for both Limit Order and Trigger Order, which can avoid users’ losses due to unfilled orders when the market fluctuates violently. Guideline of the Optimal N Order >>>
Flash Close: Flash Close is a function that would help users to place a position-closing order and make it filled at the prices within Optimal 30 based on the BBO prices. And the unfilled parts will be converted to Limit Order automatically. The close price of Flash Close is predictable, which can avoid users’ losses due to unfilled orders when the market fluctuates violently. Flash Close Operation Tutorial >>>
Stop-Limit Order: A stop-limit order is a conditional trade combining the features of a stop loss order and those of a limit order to mitigate risk. Traders often use stop-limit orders to lock in profits or to limit downside losses. Users can set a stop price and a limit price of a stop-limit order. Once the stop price is triggered, the stop-limit order becomes a limit order to buy or sell at the limit price or better. Operation Instruction of Stop-Limit Order >>>
Trailing Stop Order: help place a preset order on the condition that a larger callback occurs. When the market price of a contract meets both the activation price and the callback ratio set by users, the strategy will be triggered to place a limit order by using the preset price (Optimal N or Formula price). It is always used for buying when the market rebounds from the bottom or for selling when the market price pulls back from a high point. Operation Instruction of Trailing Stop Orders>>>
Grid Trading: grid trading is a quantitative trading strategy, when orders are placed above and below a set price, creating a grid of orders at incrementally increasing and decreasing prices in a fluctuating market. By automatically executing buy low and sell high, it guarantees the selling price is higher than the buying price each time, so as to make profits from sideways trends. Grid Trading Guide>>>
USDT-margined contract support 1x-200x leverage.
For example, if Tom selects 20x leverage to open a long or short position of BTC/USDT swaps, he only needs 10 USDT as margin to open a position of BTC/USDT swaps valued 200 USDT to gain more profits.
Before opening a position, users have to select a leverage. After the position is opened, users can switch leverage while having no open orders.
Tom’s account equity is 800 USDT, and he holds a long position of 200 conts swaps (face value=0.001 BTC/cont) with 5x leverage and its entry Price is 10,000 USDT. When the last price reaches 12,000 USDT, the profit and margin are as follows:
Profits: 400 USDT; PnL ratio is 100%;
Position margin: 480 USDT; Margin ratio: 246%
Assuming Tom adjusted to 3X leverage when the last price is 12,000 USDT, the position margin, PnL ratio and margin ratio will change accordingly without the actual profits being affected. The data after the adjustment are as follows:
Profits: 400 USDT; PnL ratio: 60.00 %;
Position margin = 200 * 0.001 * 12,000 / 3 = 800 USDT;
Margin ratio = (1,200 / 800) * 100 % - 2.5 % = 147.50 %.
Hence it can be seen that the position data such as position margin, margin ratio and PnL ratio will be affected by switching leverages when holding positions, but the actual profits will not.
1. Leverage is only available to switch for contracts in trading status.
2. Leverage is unavailable to switch when there are open orders of the contract.
3. Users can only switch leverage to an available one at that time;
4. If the available margin of user’s account is less than 0 in the condition of adjusted leverage, leverage is unavailable to switch.
5. If the margin ratio of user’s account is equal to or less than 0 in the condition of adjusted leverage, leverage is unavailable to switch.
6. Leverage switch may fail due to problems like non-trading status, insufficient margin, network problems, or system problems.
Positions a user hold will be merged if they are of the same contract type, of the same trading pair, in the same direction and under the same mode. There can be no more than 2 positions for a trading pair of the same contract type supporting only isolated margin mode; and a maximum of 12 positions for a contract type supporting both isolated and cross margin modes.
For example, BTC/USDT contract support both isolated and cross margin mode, then users could hold a long position and a short position in the isolated account of BTC/USDT swaps, as well as a long position and a short position in the cross margin account of BTC/USDT weekly, bi-weekly, quarterly ,bi-quarterly and swaps.
1. For USDT-margined contract, positions will be merged if they are of the same contract type, of the same trading pair, in the same direction and under the same mode. For example, Tom firstly opens 1 cont BTC/USDT swaps in the cross margin account, then opens two conts BTC-USDT swaps again, then there will be 3 conts BTC/USDT swaps in the cross margin account.
2. When closing a position, the system uses the moving average method to calculate the cost. That is to say, the system will not distinguish with which position or at which open price is used to close, it will use the position price as the cost price to calculate PnL instead.
For example, if Tom opens 1 cont BTC/USDT swaps at the price of 1,000 USDT in the cross margin account, and opens another two conts at the price of 1,500 USDT, then the Position Price = (1,000 * 1+1,500 * 2) / (1 + 2) = 1,333.33 USDT.
Limitation on Position and Orders
Huobi USDT-margined contracts limits individual user’s position amount and the order amount for a single position-opening/closing order, so as to prevent market from abnormal manipulation.
The limitation varies by the type of contract and trading pair. Take BTC as examples:
|Contract||Type||Mode||Position Limit for a Single User
|Amount Limit for a Single Order
[Reading more limit on types and trading pairs]
[The above data and indicator contents may be adjusted in real time according to market conditions, and the adjustments will be made without further notice.]
Position limit will be measured in USDT and the order amount (cont) shall meet the below requirements:
Open Long: (Current Long Positions (cont) * Contract Face Value * Mark Price) + (Frozen Margin of Current Long Orders * Leverage) + (Current Order Amount (cont) * Contract Face Value * Buy/Sell Price) ≤ Position Limit for a Single User _ Long (USDT)
Open Short: (Current Short Positions (cont) * Contract Face Value * Mark Price) + (Frozen Margin of Current Short Orders * Leverage) + (Current Order Amount (cont) * Contract Face Value * Buy/Sell Price) ≤ Positon Limit for a Single User _ Short(USDT)
Example 1: Assuming Tom has no open orders and positions of BTC/USDT swaps in the cross margin mode and he wants to open a long position at the price of 50,000 USDT.
As the long position limit for this contract is 50,000,000 USDT, suppose the available order amount (cont) = X, then (X * 0.001 * 50,000) ≤ 50,000,000.
Therefore, X ≤ 1,000,000 conts, and the max available order amount currently shall be 1,000,000 conts
Example 2: Assuming Tom has placed a long order of 10,000 conts BTC/USDT swaps with the price of 50,000 USDT and 10x leverage in the cross margin mode. Meanwhile, he holds a long position of 50,000 conts and the current mark price is 51,000 USDT. As the long position limit for this contract shall be 50,000,000 USDT, if he wants to further open a long position at the price of 48,000 USDT, and the available order amount (cont) = X; then it shall be calculated as below:
(50,000 * 0.001 * 51,000) + (0.001 * 10,000 * 50,000 / 10 * 10) + (X * 0.001 * 48,000) ≤ 50,000,000
Therefore, X≤ 978,125 conts, and the max available order amount currently shall be 978,125 conts.
① The above statistics are for demonstration purpose only, and the actual available order amount (cont) will be affected by changes in real-time parameters. Please refer to the real-time calculation.
② If the position or order amount too large, with the platform confirming the possibility of leading a strong risk to the system and other users, the platform has the right to require users to take risk controlling measures including but not limited to cancelling orders and closing positions. In addition, the platform has the right to control risks by limiting positions and order amount, cancelling orders or liquidation, etc.