What Is Futures Trading?

Futures trading is a type of digital asset derivatives trading. Users do not need to directly hold the underlying cryptocurrency. Instead, they can trade based on whether they expect the market price to rise or fall.

On UEEx, futures trading allows users to participate in market movements by opening either a long or short position.

• If you expect the price to rise, you can go long / open long.
• If you expect the price to fall, you can go short / open short.

Unlike spot trading, futures trading uses margin and leverage. This means users only need to provide part of the position value as margin to open a larger position. However, leverage amplifies both potential profits and potential losses, so futures trading carries higher risk than spot trading.

Features and Risks of Futures Trading

Futures trading allows users to participate in both rising and falling markets.

For example:

• If you are bullish on BTC, you can open a long position.
• If you are bearish on BTC, you can open a short position.

Futures trading uses a margin and leverage system.
For example, with 10x leverage, a 1% market movement may result in approximately a 10% change in profit or loss.

This example is for explanation only. Actual results may be affected by:

• Trading fees
• Funding fees
• Market slippage
• Position size
• Liquidation risk
• Real-time market volatility

Leverage is a double-edged tool. It can amplify profits, but it can also amplify losses. New users should use high leverage with caution.

UEEx Futures Trading Types

UEEx currently provides futures trading services. Users can select available futures trading pairs directly on the trading page.

A common format is:

USDT-Margined Perpetual Futures

Examples may include:

• BTCUSDT Perpetual
• ETHUSDT Perpetual
• XRPUSDT Perpetual

USDT-margined perpetual futures usually have the following features:

• Priced and settled in USDT
• No fixed expiry date
• Support long and short positions
• Support leverage trading
• Flexible opening and closing of positions
• Profit and loss calculated in USDT, making it easier to understand

The supported trading pairs, leverage limits, margin modes, and trading rules should always follow the actual information displayed on the UEEx trading page.

How Futures Trading Works

Users first transfer margin into their futures account. Then they choose a trading pair, set leverage, select a direction, and place an order.

Once the order is filled, a futures position is created. Users can manage the position during the holding period and close it later to settle profit or loss.

1. Choose a Futures Pair and Trading Direction

First, select the futures pair you want to trade.

Example:

BTCUSDT Perpetual

Then choose your trading direction based on your market view.

Example:

If you believe BTC will rise, you can choose Open Long.
If you believe BTC will fall, you can choose Open Short.

2. Set Leverage and Place an Order

After selecting the direction, users need to set the leverage.

Examples:

• 5x
• 10x
• 20x

The higher the leverage, the larger the position size. However, the risk will also increase.

Users also need to enter:

• Order price
• Order quantity
• Order type

Common order types include:

New users may use a market order for faster execution.
Users who want better price control may use a limit order.

3. Choose Margin Mode

Users should understand the margin mode before trading futures.

Common margin modes include:

Isolated Margin

In isolated margin mode, each position has its own allocated margin.

Key features:

• Each position is calculated separately
• Losses are mainly limited to the margin assigned to that position
• Easier to manage the risk of a single trade

This mode is suitable for users who want to control risk separately for each position.

Cross Margin

In cross margin mode, the available balance in the futures account may be shared as margin.

Key features:

• Multiple positions may share available margin
• Losses from one position may affect other positions
• Poor risk control may lead to larger losses

New users should use cross margin carefully.

Whether margin mode can be switched, and under what conditions, depends on the actual UEEx platform rules. In general, margin mode may not be switchable when there are open positions or active orders.

4. Position Management and Risk Control

After opening a position, users can view position details in the Positions section.

Common position information includes:

• Trading pair
• Position direction
• Leverage
• Entry price
• Current price
• Unrealised PnL
• Margin
• Liquidation price
• Take Profit / Stop Loss settings

Users should pay close attention to the following risk indicators.

Unrealised PnL

Unrealised PnL refers to the floating profit or loss of an open position.

It changes in real time as the market price moves.

Unrealised PnL is not final profit or loss. Profit or loss is only settled after the position is closed.

Liquidation Price

The liquidation price is one of the most important risk indicators in futures trading.

When the market price approaches the liquidation price, the position risk increases significantly.
If the margin is insufficient to maintain the position, the system may trigger forced liquidation.

Users can reduce liquidation risk by:

• Using lower leverage
• Reducing position size
• Adding margin
• Setting a stop loss
• Avoiding full-position trading

Take Profit and Stop Loss

Take Profit and Stop Loss are commonly used risk-management tools in futures trading.

• Take Profit: Automatically closes the position when the target profit price is reached.
• Stop Loss: Automatically closes the position when the preset loss price is reached.

New users are advised to set a stop loss before opening a futures position to help control downside risk.

5. Closing a Position and Settlement

When users want to end an existing position, they can close the position.

Common closing methods include:

• Manual market close
• Manual limit close
• Automatic close through Take Profit / Stop Loss
• Forced liquidation due to insufficient margin

After the position is closed, the system calculates the final profit or loss based on:

• Entry price
• Closing price
• Position size
• Trading fees
• Funding fees
• Actual execution price

The final profit or loss will be reflected in the user’s futures account balance.

Futures Trading Example

The following example is for educational purposes only and does not represent any guaranteed return.

Initial Conditions

Assume User A has:

• Futures account balance: 10,000 USDT
• Current BTC price: 50,000 USDT
• Leverage: 10x
• Long position size: 2 BTC
• Position value: 100,000 USDT

The required margin is calculated as:

Margin = Position Value ÷ Leverage

So:

100,000 USDT ÷ 10 = 10,000 USDT

Market Moves Up

If BTC rises from 50,000 USDT to 60,000 USDT:

• BTC price increase: 20%
• Position size: 2 BTC
• New position value: 2 × 60,000 = 120,000 USDT

Closing Result

After closing the position:

• Initial position value: 100,000 USDT
• Closing position value: 120,000 USDT
• Theoretical profit: 20,000 USDT

Return on margin:

20,000 ÷ 10,000 = 200%

This means that with 10x leverage, a 20% increase in BTC price may theoretically result in a 200% return on the margin used.

Risk Explanation

If the market moves in the opposite direction, losses will also be amplified by leverage.

Under the same conditions, if BTC price drops significantly, the user may face:

• Increasing unrealised losses
• Lower margin ratio
• Price moving closer to liquidation
• Forced liquidation of the position

This example is theoretical only. Actual profit or loss may be affected by trading fees, funding fees, slippage, market depth, and real-time price fluctuations.

Beginner Risk Tips

Futures trading involves high risk. New users should pay attention to the following:

1. Understand the rules before trading
   Futures trading involves leverage, margin, liquidation, and funding rates. It is different from spot trading.
2. Avoid high leverage
   High leverage makes a position more sensitive to price movements and increases liquidation risk.
3. Do not use all funds in one trade
   Keeping available balance can help manage market volatility.
4. Set Take Profit and Stop Loss
   Plan your target profit and maximum acceptable loss before opening a position.
5. Monitor the liquidation price
   If the market price approaches the liquidation price, reduce risk immediately.
6. Pay attention to funding rates
   Perpetual futures may generate funding fees. Check the funding rate before holding positions for a long period.
7. Trade rationally
   Avoid emotional trading, chasing price movements, or overtrading during volatile markets.

Disclaimer

This guide is for educational purposes only and does not constitute financial advice, investment advice, trading advice, or any guarantee of returns.

Digital asset prices are highly volatile. Futures trading involves leverage and may result in significant losses, including the loss of all margin allocated to a position. Users should trade according to their own experience, financial situation, and risk tolerance, and are solely responsible for their trading decisions.

The final interpretation right belongs to UEEx official.