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What is a perpetual contract?

A perpetual contract is a derivative contract with no expiration date that allows users to long or short the price of an underlying asset using leverage. Bifu supports perpetual contract trading for mainstream crypto assets. The price is anchored to the spot market index and maintained in balance through a funding rate mechanism.

What is the difference between futures trading and spot trading?

• Spot trading: You own the real asset upon purchase.
• Futures trading: You trade the expectation of an asset's price fluctuations without actual physical delivery. Futures support two-way trading and leverage, making them suitable for active trading and risk hedging.

What is leverage? How much leverage does Bifu support?

Bifu supports up to 200x leverage, which significantly amplifies your trading potential. You can control a larger position with a smaller amount of capital, magnifying potential gains. We have a professional risk management system to ensure security. However, leverage also magnifies risk, so use it with caution.

What are initial margin and maintenance margin?

• Initial margin: The minimum collateral required to open a position.
• Maintenance margin: The minimum balance required to maintain a position. If your account balance falls below the maintenance margin, it will trigger forced liquidation.

Why does forced liquidation happen, and how can I avoid it?

When the margin is insufficient to cover the risk of a position, the system automatically liquidates the position to prevent greater losses. To avoid this, you can: use a reasonable amount of leverage, add more margin in time, and set take-profit and stop-loss orders.

What is a funding rate? How often is it settled?

A funding rate is a fee that long and short position holders periodically pay to each other to keep the contract price close to the spot price.

• When the funding rate is positive: Longs pay shorts.
• When the funding rate is negative: Shorts pay longs. Bifu typically settles the funding rate every 8 hours. Please refer to the platform's announcements for specific times and fee policies.

How do I view my unrealized profit and loss (P&L)?

Unrealized P&L is calculated based on the mark price and reflects the real-time floating P&L of your position. It becomes realized P&L after the position is closed.

What is the mark price?

The mark price is calculated from the spot index and funding rate. It is used to calculate unrealized P&L and prevent abnormal liquidations, ensuring fair liquidation.

What is the insurance fund?

The insurance fund is used to cover system losses after forced liquidations during extreme market conditions. It ensures the safety of the counterparty's funds and prevents a negative account balance.

What is auto-deleveraging (ADL)?

When the insurance fund is insufficient, the platform automatically deleverages parts of highly profitable, highly leveraged positions to cover the losses. This mechanism is rarely triggered, and users will be notified in advance.

What are the types of futures orders?

Bifu supports:

• Limit Order: Set a price and place an order that waits to be filled.
• Market Order: Fills the order immediately at the current market price.
• Take-Profit/Stop-Loss Order: Automatically takes profit or stops loss at a target price level.

How do I manage my position and set take-profit/stop-loss?

You can choose to set take-profit/stop-loss when opening a position, or you can adjust it on the position page after the position is open. We recommend that all positions have a take-profit/stop-loss set to control risk.

What is the difference between cross-margin and isolated margin?

• Cross-margin mode: All margin in your account is pooled to support the risk of your positions. The risk is spread out but could affect your entire account balance.
• Isolated margin mode: Each position has a separate, isolated margin. The risk is relatively independent, and losses are limited to the margin allocated for that position. Choosing the right margin mode can help you manage risk and funds effectively.

What types of contracts does Bifu support?

Currently, Bifu only supports USDT-margined perpetual contracts, which use USDT as the margin and settlement asset.

Futures Trading Risk Warning

Futures trading involves high risk and high reward. Please use leverage reasonably based on your experience and risk tolerance, and trade cautiously after you become familiar with the market rules.