1. What is a Perpetual Contract?
A 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, with price tracking the underlying Index Price closely. It achieves this via the mechanics of a Funding component.
2. What is the Mark Price?
The Mark Price is the index used to calculate the Unrealized PNL and Liquidation Price for Contracts.
3. How does FMex determine the price of a perpetual or futures contract?
FMex marks contracts according to the Fair Price Marking Method. This price determines the trader’s Unrealized PNL. Realized PNL will be determined according to his/her entry price and exit or Settlement Price and any fees incurred.
4. How much leverage does FMex offer?
The amount of leverage FMex offers varies from product to product, and the highest leverage FMex offers is up to 100x leverage.
Leverage is determined by the Initial Margin and Maintenance Margin levels. These levels specify the minimum equity the trader must hold in his/her 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 on Risk Limits page.
5. What is Initial Margin?
Initial Margin is the minimum margin you must deposit to open a position.
6. What is Maintenance Margin?
Maintenance Margin is the minimum margin you must hold to keep a position open. If your margin balance drops below this level your position will be taken over by the Liquidation Engine and be Liquidated.
7. 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).
8. How does the Liquidation 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.
9. What is the Insurance Fund?
The Insurance Fund is used to prevent ADL.
The Insurance Fund grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price of that particular position.
10. What is Auto-Deleveraging(ADL)？
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.
11. Does FMex socialise losses?
No. FMex uses an Auto-Deleveraging System that does not need to socialise losses.