Futures Guide

Perpetuals Trading Series: How EQUOS deals with liquidation

January 22, 2021

As we explained in the previous sections in this guide, an account is only able to send new orders as long as its Total Account Margin is higher than the Initial Margin required for all open positions and open orders. As soon as the Total Account Margin drops below the Initial Margin, the account can no longer send any new orders unless such order would reduce the existing position (e.g. a sell order, when the current position is long). To continue adding positions (e.g. add buy orders, when the current position is long), the trader will have to transfer additional funds that can be used for margin to their wallet, close open orders, or close open positions.

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Perpetuals Trading Series: What is Basis and why is it important?

January 21, 2021

As we mentioned previously, perpetuals have a mechanism to ensure pricing aligns with the underlying spot product. We refer to the spread between the Spot and the Perpetual contract as Basis. The resulting exchange of payment between long and short holders of the contract is called the Basis Payment.

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Perpetuals Trading Series: How does Marking work on EQUOS?

January 19, 2021

On EQUOS, we differentiate between the Market Price and the Mark Price of the perpetual. The Market Price is the last traded price of the product on EQUOS. The Market Price may deviate (significantly) from the rest of the market for example in case of large orders or an illiquid order book. The Mark Price gives a fairer value for the contract by taking a 3-second TWAP of the Market Price. A TWAP is the average of the open, high, low and close price for a specific period. In the case of the Mark Price these periods are three 1-second intervals. As the Mark Price is used for P&L calculation and to determine whether the position needs to be liquidated, using a TWAP to smooth out temporary spikes in prices should prevent unnecessary liquidations.

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Introduction to Leverage, Margin, and Liquidation

January 7, 2021

Many virtual currency exchanges advertise the ability to trade products with leverage. In traditional finance, there are a number of popular leveraged products, such as ETFs. An ETF is a product that moves as a function of the underlying factor and the leverage factor. For example, an ETF that has 5x leverage will lose or gain 5% if the underlying asset moves by 1%. Leverage defines your position’s exposure to the underlying asset class.

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Beginners Guide to Derivatives

December 19, 2020

What are derivatives? Derivatives have been around for millennia; their use can be traced back to ancient times when people bartered with one another to trade perishable goods such as grain and livestock[1]. They gained widespread popularity during the rise of the financial services sector, when newer valuation techniques were created in the 1970s and rapidly developed the derivatives market. It is difficult to imagine modern finance without derivatives now.

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Perpetual Futures Trading Guide

December 3, 2020

This handy guide will explain everything you need to know about EQUOS Perpetual futures, from the very basics for the newbies right up to the intricacies for the most advanced traders.

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