Contracts

Contracts

What is a Perpetual Contract?

Perpetual Contract is a product similar to a traditional Futures Contract in how it trades, but does not have an expiry, so you can hold a position for as long as you like. Perpetual Contracts trade like spot, tracking the underlying Index Price closely. It achieves this via the mechanics of a Funding component.

What is a Futures contract?

Futures Contract is an agreement to buy or sell a commodity, currency or other instrument at a predetermined price at a specified time in the future.

What maturity does Earnfx offer on its contracts?

 Earnfx

 offers perpetual contracts and many different fixed-date expiries.

What is the Mark Price?

The Mark Price is the price at which the contract is marked for Unrealised PNL and Liquidation purposes.

 How are Earnfx indices calculated?

 Earnfx

 indices are calculated using a weighted average of last Prices. See  Earnfx indices.

How does  Earnfx determine the price of a perpetual or futures contract?

 Earnfx

 marks contracts according to the Fair Price Marking Method. This price determines your Unrealised PNL. Realised PNL will be determined according to your entry price and your exit or Settlement Price and any fees incurred.

How is the Settlement Price calculated?

The Settlement Price is the price at which a Futures contract settles. To avoid price manipulation,  Earnfx employs an averaging over a period of time prior to settlement and this time frame may vary from instrument to instrument. Please reference each contracts’ specification that you wish to trade.

How do I Buy or Sell a perpetual or future contract?

In the Trade tab, on the “Place Order” section you can specify the quantity, price and direction.

What is a Bid and an Ask?

A Bid is a standing order where the trader wishes to buy a contract at a specified price and quantity. An Ask is a standing order where the trader wishes to sell a contract at a specified price and quantity.

Does  Earnfx have any market makers?

 Earnfx 

has an anchor market maker who continuously quotes large sizes on contracts that  Earnfx offers. No special privileges are given to any of the market makers.

Leverage

Does  Earnfx offer leverage?

Yes,  Earnfx offers leverage on all of its products.

How much leverage does  Earnfx offer?

The amount of leverage  Earnfx offers varies from product to product. Leverage is determined by the Initial Margin and Maintenance Margin levels. These levels specify the minimum equity you must hold in your account to enter and maintain positions. Leverage is not a fixed multiplier but rather a minimum equity requirement. You can see the minimum Initial Margin and Maintenance Margin levels for all products here.

The highest leverage  Earnfx offers is up to 100x leverage on its Perpetual Bitcoin / USD Perpetual Contract.

What is Initial Margin?

Initial Margin is the minimum amount of Bitcoin you must deposit to open a position.

What is Maintenance Margin?

Maintenance Margin is the minimum amount of Bitcoin you must hold to keep a position open. If your margin balance on  Earnfx drops below this level your position will be taken over by the Liquidation Engine and be Liquidated.

Liquidation

Why did I get liquidated?

When the Mark Price of a contract falls below your liquidation price for longs, or rises above your liquidation price for shorts, your Maintenance Margin level has been breached and the Liquidation Engine takes over your position. In your Trade History, the price the liquidated position was closed at is the Bankruptcy Price (equivalent to where your Maintenance Margin is equal to 0).

How does the Liquidation Engine work?

Upon liquidation, the Liquidation Engine attempts to close the position at the prevailing market price. If it is unable to do so then Auto-Deleveraging will occur.

Can I go bankrupt?

No. We have a sophisticated margin and liquidation process that is designed to prevent any trader’s margin balance on  Earnfx from ever going below 0.

Do you socialise losses?

No.  Earnfx employs an Auto-Deleveraging System that does not need to socialise losses.

What is Auto-Deleveraging?

Auto-Deleveraging occurs when a liquidation remains unfilled in the market. Traders who hold opposing positions will be closed out according to leverage and profit priority.