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HashKey Global Team

Understanding the Additional Risks of Low-Market-Cap Digital Asset Perpetual Futures
Perpetual futures contracts have become a popular tool for trading digital assets, offering leveraged exposure and the ability to speculate on price movements without an expiration date. However, trading perpetual futures on low-market-cap digital assets introduces a heightened level of risk that traders must understand and carefully manage.
 
What are Low-Market-Cap Digital Assets?
Low-market-cap digital assets are cryptocurrencies with a relatively small total value in circulation. These assets are often newer, less established, and subject to greater price volatility than larger, more liquid cryptocurrencies like Bitcoin or Ethereum.
 
Increased Risks Associated with Low-Market-Cap Digital Asset Perpetual Futures
  1. Heightened Price Volatility:
    1. Low-market-cap assets are inherently more volatile due to their susceptibility to market sentiment, news events, and manipulative trading practices. Perpetual futures amplify these price swings, potentially leading to rapid and substantial losses.
    2. Implication: Traders must be aware that relying on historical price data or technical analysis may be less reliable for low-market-cap assets, increasing the risk of inaccurate predictions.
  2. Lower Liquidity:
    1. Low-market-cap assets typically have lower trading volumes and less liquidity. This can result in significant slippage (the difference between the expected price and the actual price at which a trade is executed) when entering or exiting positions.
    2. Implication: In extreme market conditions, it may be difficult or impossible to close out a position in a low-market-cap perpetual future, potentially leading to unlimited losses.
  3. Increased Risk of Market Manipulation:
    1. Due to their smaller market size, low-market-cap assets are more susceptible to market manipulation schemes such as pump-and-dumps, wash trading, and other fraudulent activities.
    2. Implication: Traders should exercise extreme caution and conduct thorough due diligence before trading perpetual futures on low-market-cap assets, as they may be victims of market manipulation.
  4. Greater Funding Rate Volatility:
    1. The funding rate mechanism, which is designed to keep the perpetual futures price aligned with the underlying asset's spot price, can be more volatile for low-market-cap assets. This can result in unpredictable and potentially substantial funding payments, impacting profitability.
    2. Implication: Traders should monitor funding rates closely and factor them into their trading strategies, as high or fluctuating funding rates can significantly erode profits or increase losses.
  5. Higher Liquidation Risk:
    1. The combination of high volatility, low liquidity, and leveraged positions in perpetual futures increases the risk of liquidation. A small adverse price movement can trigger a liquidation event, resulting in the complete loss of the trader's margin.
    2. Implication: Traders must carefully manage their leverage and margin levels to avoid liquidation, and should consider using stop-loss orders to limit potential losses.
 
Risk Management Tips for Trading Low-Market-Cap Digital Asset Perpetual Futures
  1. Start with Low Leverage: Employ conservative leverage ratios (e.g., 2x or 3x) to mitigate the impact of price volatility.
  2. Use Stop-Loss Orders: Implement stop-loss orders to automatically close out positions if the price moves against you, limiting potential losses.
  3. Monitor Funding Rates: Keep a close watch on funding rates and factor them into your trading decisions.
  4. Diversify Your Portfolio: Avoid allocating a disproportionate amount of capital to low-market-cap assets.
  5. Conduct Thorough Due Diligence: Research the asset, its team, and its underlying technology before trading.
  6. Understand the Risks: Ensure a comprehensive understanding of the risks associated with perpetual futures and low-market-cap assets before engaging in trading.
 
Conclusion
Trading perpetual futures on low-market-cap digital assets carries substantial risks that traders must carefully consider. While the potential for high returns exists, the potential for significant losses is equally real. By understanding these risks and implementing prudent risk management strategies, traders can better protect their capital and navigate the complexities of this market.
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HashKey Global Team

Essential Tips for Avoiding Mistakes in Crypto Derivatives Trading

Introduction

Crypto derivatives trading offers immense profit potential, but it’s also riddled with risks that can quickly wipe out portfolios. From volatile price swings to complex financial instruments, even experienced traders can fall victim to common pitfalls. Whether you’re new to leveraged futures, options, or perpetual swaps, avoiding mistakes starts with education, discipline, and preparation. In this guide, we’ll explore actionable tips to help you trade smarter, minimize losses, and build long-term success in the fast-paced world of crypto derivatives.

  1. Master Risk Management

Risk management isn’t optional—it’s the backbone of sustainable trading. Crypto derivatives amplify gains and losses, so protecting your capital should always come first:
  • Use Stop-Loss Orders: Automatically exit losing positions before they spiral. Set stop-loss levels based on technical analysis or a percentage of your portfolio.
  • Position Sizing: Never allocate too much capital to a single trade. Over-leveraging is a fast track to margin calls.
  • Diversify Strategies: Don’t put all your eggs in one basket. Combine long/short positions, hedging, or volatility-based plays to spread risk.
 
Tip: Study concepts like “risk-reward ratio” and “maximum drawdown.” Tools like platforms’ built-in calculators can help model scenarios before executing trades.

  1. Avoid Emotional Trading (Stay Cool Under Pressure)

Fear and greed are the enemies of rational decision-making. Emotional trading leads to impulsive moves like chasing pumps, holding losing positions too long, or panic-selling. Combat this by:
  • Creating a Trading Plan: Define entry/exit rules, profit targets, and risk tolerance before opening a position.
  • Automating Decisions: Use take-profit and stop-loss orders to enforce discipline.
  • Taking Breaks: Step away during extreme market volatility or after a losing streak.
 
Tip: Learn about behavioral finance biases (e.g., FOMO, confirmation bias) through courses or books.

  1. Test Strategies in Safe Environments (Practice Before You Profit)

Would you drive a race car without practice? Similarly, never deploy untested strategies with real funds.
  • Use Demo Accounts: Utilize the demo trading feature to simulate and practice trading without any financial risk.
  • Backtest Historical Data: Analyze how your strategy would have performed in past market cycles.
  • Start Small: Once live, test with minimal capital to gauge real-world performance.
 
Tip: Always validate your strategy across multiple market conditions (bull, bear, sideways) using demo accounts and historical data before risking real capital.

  1. Stay Updated on Market Conditions

Crypto markets move at lightning speed. Staying informed helps you anticipate trends and avoid surprises:
  • Follow Macro Trends: Interest rates, regulations, and geopolitical events impact crypto.
  • Track On-Chain Metrics: Monitor exchange reserves, whale activity, and network growth.
  • Leverage News Aggregators: Use news channels or aggregation channels to get real-time updates.
 
Tip: Gather as much on-chain data and derivatives information as possible, along with market news, to enhance your analysis.

  1. Start Small and Scale Gradually

Patience pays. Many traders blow up accounts by jumping into high-stakes trades too soon.
  • Begin with Low Leverage: Even 2–5x leverage can magnify gains without excessive risk.
  • Track Performance: Journal every trade to identify patterns and improve over time.
  • Scale Up Slowly: Increase position sizes only after consistently profitable results.
 
Tip: Treat your first 100 trades as a paid education—track every decision, learn from losses, and only scale when your edge is statistically proven.
 

Conclusion

Crypto derivatives trading isn’t a get-rich-quick scheme—it’s a skill honed through education, discipline, and adaptability. By mastering risk management, staying emotionally detached, and rigorously testing strategies, you’ll sidestep the mistakes that derail most traders. Remember: security and continuous learning are your allies. Start small, stay curious, and let compounding gain work in your favor.
Disclaimer: Trading derivatives involves significant risk. This is not financial advice.
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HashKey Global Team

How to Prevent Liquidation of Perpetual Futures Positions?

Introduction

The cryptocurrency market’s volatility offers immense profit potential but also carries significant risks—especially for traders using perpetual futures. A single misstep, like a sudden price swing or poor risk management, can lead to liquidation, wiping out your position entirely. Whether you’re a novice or an experienced trader, understanding how to prevent liquidation is critical. This blog breaks down what liquidation means, its consequences, and actionable strategies to safeguard your trades.

Understanding Liquidation in Perpetual Futures

Perpetual futures are derivative contracts that function like traditional futures but have no expiry date. Instead, they use a funding rate mechanism to keep their prices aligned with spot markets. To trade perpetual futures, you must deposit an initial margin (collateral) to open a position. However, exchanges enforce a maintenance margin threshold—the minimum equity required to keep your position active. If your balance falls below this threshold, liquidation occurs.

How Liquidation Works: A Step-by-Step Timeline

Let's take an example of Liquidation in Perpetual Futures: Alice believes Bitcoin will rise in price and opens a long position using
10x leverage with an initial margin of $1,000. This allows her to control a $10,000 position.

1️⃣ Opening the Position: Alice goes long on Bitcoin at $100,000 per BTC.
2️⃣ Price Drops: Bitcoin's price falls to $95,000 (5%), causing unrealized losses. Since Alice used 10x leverage,
she lost $500, her losses are amplified.
3️⃣ Reaching the Maintenance Margin: The exchange sets the maintenance margin requirement at 5%, meaning
Alice must maintain at least $50 in equity. As Bitcoin’s price continues falling, Alice's equity approaches this threshold.
4️⃣ Liquidation Triggered: At $90,500, Alice’s account equity drops below the required maintenance margin.
Since she hasn’t added more funds, the exchange automatically liquidates her position.
5️⃣ Position Closed at the Bankruptcy Price: The liquidation engine closes Alice’s position near $90,000, locking in
her losses.
6️⃣ Fees & Final Impact: Alice loses her initial $1,000 margin, along with any liquidation fees. If market volatility
were extreme, she could have lost even more if the liquidation engine couldn't close her trade in time.

Key Factors Influencing Liquidation

✅ Leverage: Higher leverage increases position size but also makes liquidation more likely due to smaller price movements
impacting margin levels significantly.
✅ High Volatility: Sudden market swings can lead to rapid liquidation, especially
if protective measures like stop-loss orders aren’t in place.
✅ Margin Type (Cross vs. Isolated): In isolated margin mode, only the assigned margin is at risk, while in cross margin mode,
the entire account balance may be used to prevent liquidation.
✅ Funding Rates: If a trader holds a position for an extended period, funding fees can gradually erode their margin,
increasing liquidation risk.
✅ Mark Price vs. Last Traded Price: Exchanges use the mark price (an average of spot prices) instead of the last traded
price to trigger liquidation, preventing price manipulation.

Liquidation isn’t just a financial hit—it disrupts your strategy and confidence.

How to Prevent Liquidation: 8 Proactive Strategies

1.Use Stop-Loss Orders
What to Do: A stop-loss order automatically closes your position at a predefined price, helping to limit losses.
Why It Helps: It prevents your position from reaching the liquidation threshold by ensuring losses are capped early.
Tip: Set stop-loss levels based on technical analysis (e.g., below key support levels) rather than using arbitrary numbers.
Before trading live, test different stop-loss strategies in a demo account to see what works best for your approach.

2.Maintain a Healthy Margin Ratio
What to Do: Your margin ratio = (Equity / Used Margin) × 100. A higher margin ratio provides more buffer against sudden price swings.
Why It Helps: Keeping a sufficient margin balance reduces the likelihood of liquidation when the market moves against you.
Tip: If you're holding a long-term position, keep your margin ratio as high as possible to withstand market fluctuations.
Monitor your margin levels frequently, especially during periods of increased volatility, such as major economic announcements
or unexpected market events.

3.Avoid Over-Leveraging
What to Do: Using excessively high leverage (e.g., 20x) significantly increases risk, as even small price movements can lead to liquidation.
Why It Helps: Lower leverage (e.g., 3x–5x) gives your position more room to "breathe," reducing the chances of getting liquidated.
Tip: Before selecting leverage, calculate your maximum acceptable loss. For instance, at 10x leverage, a 10% price move wipes out your position.
Choose leverage that aligns with your risk tolerance and trading strategy.

4.Monitor Positions Actively
What to Do: Regularly check your positions, margin levels, and market conditions to stay ahead of sudden price movements.
Why It Helps: Being proactive allows you to make necessary adjustments before liquidation occurs, such as adding more margin or
closing a position early.
Tip: Set up price alerts on trading platforms or mobile apps to notify you of critical price movements. Never leave high-leverage positions
unattended, especially during volatile market hours or before major economic events.

5.Diversify Your Portfolio
What to Do: Spread your investments across different assets instead of concentrating all capital into a single trade.
Why It Helps: Diversification reduces exposure to single-market volatility, protecting you from drastic price swings in one asset.
Tip: Allocate only a small portion of your trading capital to any single perpetual futures position. Instead of going all-in on one trade,
balance your risk by investing in multiple assets or hedging with spot positions.

6.Understand Funding Rates
What to Do: Be aware of periodic funding payments between long and short traders. Depending on market conditions, you may
pay or receive funding fees.
Why It Helps: Holding a position in a market with high funding rates can gradually erode your profits, especially for long positions.
Tip: Check historical funding rates before opening a trade and avoid holding positions during periods of extreme funding costs.
Some exchanges provide insights into expected funding fees, so use this data to make informed decisions.

7.Use Risk Management Tools
What to Do: Take advantage of risk management tools such as Take-Profit orders, Trailing Stops, and Hedging with spot markets.
Why It Helps: Automating profit-taking and setting predefined risk levels reduces emotional decision-making and prevents unnecessary losses.
Tip: Always pair a stop-loss order with a take-profit order to maintain a favorable risk-reward ratio. If you aim for a 3:1 risk-to-reward ratio,
a stop-loss at -5% should be matched with a take-profit at +15%.

8.Stay Informed and Educated
What to Do: Keep up with market news, technical indicators, liquidation heatmaps, and upcoming macroeconomic events.
Why It Helps: Understanding market trends, news catalysts, and major liquidity zones helps traders anticipate volatility, reducing
unnecessary exposure to liquidation risk.
Tip: Follow key financial events such as Federal Reserve announcements, Bitcoin ETF approvals, or regulatory news, as they often
trigger large price swings. Educate yourself continuously by analyzing past liquidation events and learning from market history.

Final Thoughts
Liquidation isn’t inevitable—it’s a preventable outcome with disciplined risk management. By educating yourself on leverage,
margin, and market mechanics, you can trade perpetual futures confidently. Remember: surviving in volatile markets isn’t about
avoiding losses entirely; It's about controlling your emotions so you can stay in the trade and make rational decisions.
Take Action Today:
Review your open positions.
Adjust leverage and set stop-losses.
Commit to continuous learning.
Trade smart, stay safe, and never risk more than you can afford to lose!
Disclaimer: Trading derivatives involves significant risk. This is not financial advice.

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HashKey Global Team

What are Perpetual Futures?

Introduction to Perpetual Futures

Perpetual futures, also known as a perpetual swap, have become a cornerstone of the cryptocurrency trading landscape. These innovative derivatives offer traders a unique way to speculate on the price movements of digital assets without the limitations of traditional futures contracts. Unlike traditional futures contracts, perpetual futures have no expiration date, allowing traders to hold positions indefinitely.

How Do Perpetual Futures Work?

Perpetual futures function similarly to traditional futures but eliminate the hassle of contract expirations. Here’s a simplified breakdown:
  1. Leverage & Margin: Traders can amplify their positions using leverage (e.g., 10x, 20x). For example, imagine that Bob believes that the price of Bitcoin will rise. Bob decides to open a long position in Bitcoin perpetual futures with 10x leverage. Bob's margin is $1,000 (original investment), and Bob uses 10x leverage to control a $10,000 position. If Bitcoin’s price rises by 5%, Bob earns a 50% return on his initial capital, i.e. $500. However, if Bitcoin’s price drops by 5%, Bob loses $500, half of his original investment.
  2. Funding Rate: To keep perpetual futures prices aligned with the underlying asset’s spot price, exchanges use a funding rate. This periodic payment (every 8 hours typically) is exchanged between long and short positions. If the funding rate is positive, longs pay shorts; if negative, shorts pay longs. For example, if Bitcoin’s perpetual futures price is higher than its spot price, longs pay a funding fee to shorts, incentivizing price equilibrium, and vice-versa.
  3. Mark Price: To prevent market manipulation, the mark price is determined by averaging spot prices from major exchanges, ensuring fair settlement and reducing liquidation risks.

Main Features of Perpetual Futures

  1. No Expiry Date: Hold positions as long as you want without rolling contracts.
  2. High Leverage: Leverage is often up to 20x, amplifying gains (or losses).
  3. 24/7 Trading: Unlike traditional markets, crypto perps trade around the clock.
  4. Hedging & Speculation: Use perps to hedge portfolio risks or speculate on price movements.

When Should You Trade Perpetual Futures?

Perpetual futures offer flexibility across various trading strategies:
  1. Leveraged Exposure Without Holding the Asset: Gain exposure to cryptocurrencies like Bitcoin and Ethereum without owning them directly, while utilizing leverage to enhance returns.
  2. Hedging Portfolio Risks: Mitigate potential losses by taking offsetting positions. For instance, if you hold Bitcoin in the spot market, shorting a perpetual contract can protect against downside risk.
  3. Arbitrage Opportunities: Take advantage of price differences between perpetual futures and spot markets to generate low-risk profits.
📌 Tip: Since the funding rate increases over time, using perpetual is typically used to implement short-term strategies.

Risks Involved in Trading Perpetual Futures

While lucrative, perpetual futures come with significant risks:
  1. Leverage Risk: High leverage magnifies losses. A small price drop can liquidate your position if margins aren’t maintained.
  2. Funding Rate Costs: Frequent positive funding rates can erode profits for long-term long positions.
  3. Market Volatility: Crypto markets are notoriously volatile, leading to rapid, unpredictable price swings.
  4. Liquidity Risk: Low-liquidity markets may result in slippage or difficulty exiting positions.
📌 Risk Management Tips:
  • Start with low leverage (5x or less).
  • Set stop-loss orders to limit losses.
  • Monitor funding rates regularly.
  • Never invest more than you can afford to lose.

Conclusion: Educate Yourself Before Trading

Perpetual futures are powerful financial instruments that allow traders to speculate on asset prices without owning them, with no expiry dates and the ability to hold positions indefinitely. Their key features include high leverage, 24/7 trading, and a funding rate mechanism that aligns prices with the spot market. Traders use them for leveraged exposure, hedging risks, and arbitrage opportunities.
However, success in trading perpetual futures requires knowledge, discipline, and risk management. These derivatives are not a "get-rich-quick" scheme—understanding market mechanics and staying updated on price movements is essential.
Whether you’re hedging, speculating, or arbitraging, education is your most valuable tool. Consider practicing with demo accounts, studying historical funding rates, and continuously improving your trading strategies. In trading, knowledge isn’t just power—it’s profit.

Ready to Dive In?

Before trading perpetual futures, research platforms, compare fees, and test strategies in low-risk environments. The market will always be here—make sure you’re prepared for it.
📌 Disclaimer: Trading derivatives involves significant risk. This is not financial advice.
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Futures Trading Fees

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HashKey Global Team

Fee calculation method

Perpetual Futures only support trading using USDT, so fees can only be deducted in USDT.
For example: A user places a market order to sell 0.5 BTC for 25,000 USDT in the BTC/USDT perpetual Futures and then sets a limit order to buy 0.4 BTC for 22,000 USDT. The user's fee calculation is as follows:
For instance:
Maker fee rate: 0.06%
Taker fee rate: 0.06%
Fee for selling short: 25,000 * 0.5 * 0.06% = 7.5 USDT
Fee for buying long: 22,000 * 0.4 * 0.06% = 5.28 USDT

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HashKey Global Team

Funding Rate Overview

What is the Funding Rate?

The funding rate is a periodic fee exchanged between traders in perpetual Futures, designed to keep the futuret price in line with the spot price of the underlying asset. When the market is bullish, the funding rate is positive, and long-position traders pay a fee to short-position traders. Conversely, when the market is bearish, the funding rate is negative, and short-position traders pay a fee to long-position traders.

How is the Funding Rate Calculated?

The funding rate is calculated using the following formula:
Funding Amount=Nominal Position Value×Funding Rate
Where:
Nominal Position Value=Mark Price×Number of Contracts
It is important to note that exchanges do not charge any fees from the funding rate itself; the funds are directly transferred between users. Funding payments occur every 8 hours at 00:00 UTC, 08:00 UTC, and 16:00 UTC. Traders are required to pay or receive the funding fee only if they have an open position at the scheduled funding times. If a trader closes their position before the funding time, they neither pay nor receive any funding fee. There is a 15-second margin of error for the actual funding payment time. For example, if a trader opens a position at 08:00:05 UTC, they will still be subject to the funding fee (either paying or receiving it).
 

Factors Determining the Funding Rate

The funding rate is determined by two factors: the interest rate and the premium. The premium helps align the perpetual future price with the underlying asset price.
The formula for the funding rate (F) is:
F=Average Premium Index(P)+Clamp(Interest Rate−Average Premium Index(P),0.05%,−0.05%)
  1. Interest Rate: Exchanges use a fixed interest rate, assuming that holding equivalent cash earns more interest than holding an equivalent amount of BTC. The default interest rate difference is set at 0.03% per day (0.01% per 8-hour funding interval). This rate can change according to market conditions, such as adjustments to the federal funds rate.
  2. Premium: Significant differences can arise between the perpetual future and mark prices. The premium index is used to force the two prices to converge. It is calculated for each contract separately using the formula:
Premium Index(P)=[max⁡(0, Impact Bid Price−Price Index)−max⁡(0, Price Index−Impact Ask Price)]/Price Index
Where:
  • Impact Bid Price: The average price of executing a buy order with the impact margin amount (IMN).
  • Impact Ask Price: The average price of executing a sell order with the impact margin amount (IMN).
  • Price Index: A weighted average price index derived from a basket of major spot exchanges, based on their trading volumes.
For USD-based futures, the IMN is calculated with a margin amount of 200 USDT and is configured via the backend. For example, if the maximum leverage for a BTCUSDT perpetual future is 20x with an initial margin rate of 5%, the IMN is:
IMN=200 USDT/5%=4,000 USDT
The system measures the average impact bid/ask prices every minute using this IMN.

Funding Rate Limits

The funding rate has upper and lower limits, defined as follows:
  • Lower Limit: −0.75×Maintenance Margin Rate
  • Upper Limit: +0.75×Maintenance Margin Rate
The final funding rate is clamped within these limits:
Clamped Funding Rate=clamp(Funding Rate,Lower Limit,Upper Limit)
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Leverage and Risk Control

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HashKey Global Team

Forced Liquidation Process (USDT Perpetual Futures)

Cross Margin Mode:

During the liquidation process, the following key price concepts need to be clarified:

Mark Price:
The risk ratio that triggers liquidation is calculated based on the mark price. The mark price is derived from indices of multiple platforms and more accurately reflects the fair value of the asset, helping to avoid liquidation risks caused by abnormal market fluctuations. When the margin maintenance ratio calculated based on the mark price (Position Maintenance Margin ÷ Total Account Equity) reaches 100%, the position will be liquidated.

Liquidation Price:
Reaching the liquidation price means that the assets in the account are reduced to just the maintenance margin, with all other assets lost. The system calculates the liquidation price for each contract type based on the account’s cross margin holdings, contract account balance, and unrealized PnL of all positions.

Bankruptcy Price:
The bankruptcy price indicates that all assets in the account are completely lost. The system uses the bankruptcy price as the price for liquidating the order.

Execution Price:
Once the system places an order at the bankruptcy price, the actual execution will depend on the counterparty's trade results. This price may differ slightly from the bankruptcy price. Currently, HashKey contracts use the system account to take over the position at the bankruptcy price, meaning that the execution price is generally equal to the bankruptcy price.

Isolated Margin Mode:
The liquidation process for isolated margin mode is similar to that of cross margin mode. The only difference lies in the mechanism for triggering liquidation:

  • In cross margin mode, liquidation occurs when the overall account risk ratio reaches 100%.
  • In isolated margin mode, the liquidation price is calculated individually for each position based on its specific margin. When the mark price reaches the liquidation price in isolated mode, the system initiates the liquidation process.

If Liquidation is Triggered:
All open orders will be canceled immediately.

For users with positions in the second tier or above of the position limit, the liquidation engine will attempt to reduce the user’s margin tier to lower the required margin by:

  1. Canceling unfilled orders for the contract while retaining the existing position to reduce the user’s margin tier.
  2. Submitting Immediate-Or-Cancel (IOC) orders. These orders will be filled as much as possible, with unfilled portions canceled.

If the position remains in liquidation status, the liquidation engine will take over the position at the bankruptcy price.

When Liquidation Executes at the Bankruptcy Price:

  • If the position is executed at a price better than the bankruptcy price, any remaining margin will be added to the insurance fund.
  • If the position cannot be executed at a price better than the bankruptcy price, the shortfall will be covered by the insurance fund.
  • If the insurance fund reaches a predetermined threshold, the ADL (Auto-Deleveraging) logic will be triggered. In this case, accounts with the highest profits and lowest margin ratios will be more likely to be selected as counterparties for ADL, resulting in automatic position reduction.
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HashKey Global Team

How to Reduce Forced Liquidation Risk

1. Monitor Margin Ratio:


To avoid forced liquidation, it's essential to monitor the margin ratio of the futures while holding positions. If the margin ratio reaches 100%, the held position will be forcibly liquidated.
The margin ratio is calculated as Maintenance Margin / Margin Balance.
Once the margin balance falls below the maintenance margin, the trading platform will force the position to be liquidated.
To hedge against price declines, the futures account must deposit sufficient margin balances. The higher the margin balance, the lower the forced liquidation price.

 

2. Use Stop Loss Orders to Reduce Potential Losses:


Stop-loss orders are conditional orders that are executed at a specific price after reaching a preset stop-loss point. Once the stop-loss price is reached, the system will execute the order at market/limit price.
Stop-loss orders can help investors reduce position losses in unfavorable market conditions and avoid forced liquidation.

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HashKey Global Team

Auto-Deleveraging (ADL) Rules
Auto-Deleveraging (ADL) is a mechanism used to mitigate the risk of market liquidation. When forced liquidation occurs in the market, if the risk protection fund cannot cover the liquidation losses, the ADL mechanism is triggered. HashKey strives to avoid such situations, but due to high market volatility and high leverage in the future market, such situations can still surface.
When ADL is triggered, the platform will no longer place orders in the market. Instead, it will directly match the order with the top-ranked counterparty account at the current mark price. Currently, the ADL mechanism implemented by HashKey is only applicable to USDT settlement perpetual futures.
The ranking of counterparties for ADL is based on position returns. Users can see the related indicator lights on the positions page. The relevant formulas are as follows:
  • Profit Position: Return rate * Leverage multiple
  • Loss Position: Return rate / Leverage multiple
Return Rate = (Position Profit / Position Margin) * 100%
  • Long Position Profit: (Closing Average Price - Opening Average Price) * Closing Quantity
  • Short Position Profit: (Opening Average Price - Closing Average Price) * Closing Quantity
  • Opening Margin: (Opening Quantity * Opening Average Price) / Leverage Multiple
According to the above rules, accounts with higher return rates and lower position margin rates are more likely to be selected as ADL counterparties, facing the risk of auto-deleveraging. Users can see their ADL risk in real-time through the signal lights on the page.
There are 5 levels of signal lights. When all 5 lights are on, it means the position ranks high as a counterparty and has a high risk of auto-deleveraging. When only 1 light is on, it means the position ranks low as a counterparty and has a low risk of auto-deleveraging. When users are auto-deleveraged, they will receive SMS and email notifications informing them of the positions reduced and the reduction prices. They can also check the reduced positions in the order center, where the bill type will be listed as auto-deleveraging.
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Futures Rules

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HashKey Global Team

Profit and Loss Calculation in USDT Margin Accounts

Available Balance:
The available balance in USDT margin Futures is calculated as follows:
Available balance = Account balance + Realized P&L of all Futures + Unrealized P&L of all contracts

 

Unrealized P&L:
This refers to the profit or loss of the positions currently held by the user, which changes with the mark price. Unrealized P&L is the profit or loss of all positions currently held in U-based Futures under cross margin mode.

Long position unrealized P&L = (Mark price - average entry price) * position quantity
Short position unrealized P&L = (average entry price - Mark price) * position quantity

 

Realized P&L:
This refers to the profit or loss generated by closed positions, transaction fees, and funding fees received or paid during the period. Realized P&L cannot be withdrawn from the USDT margin account until settlement.
Realized P&L = (Closing transaction price - average entry price) * transaction quantity

 

Average Entry Price:
The average entry price is the price used by the system to calculate the user's unrealized P&L and realized P&L. This price is adjusted accordingly after each contract settlement or additional position, but changes in the average entry price do not affect the user's actual profits and losses. When closing a position, the cost is calculated using the moving average method. That is, when closing a position, the system calculates the profit or loss based on the average holding price, rather than distinguishing which opening price the position was opened at.

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HashKey Global Team

Why Was the Position Liquidated Despite Setting a Stop Loss?

The main reason for a position being liquidated despite setting a stop loss is that the user chose a different trigger price for the stop loss.
On HashKey Global, forced liquidation is triggered based on the mark price.
Users can choose whether the stop loss is triggered by the latest price or the mark price.
Therefore, the mark price might trigger forced liquidation before the latest transaction price triggers the stop loss.
Thus, HashKey Global users can choose the stop-loss trigger price based on their trading strategy.


How to Check the Selected Stop Loss Trigger Price?


1. Step 1: Go to the Order History.
2. Step 2: Select the relevant trading pair.
3. Step 3: Check the 'Trigger Price' column.


Why is the Stop Loss Order Status Displayed as 'Canceled'?


When a position is liquidated, the system will cancel all active orders, conditional orders, take profit, and stop loss orders, and reset the position information.

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HashKey Global Team

Why did my limit order execute immediately?

A limit order allows traders to set a specific execution price. Compared to market orders, limit orders provide traders with better control over the buy or sell price of their positions, at the expense of guaranteeing order execution.

 

The main reason a limit order executes immediately is as follows:


When the user's limit price matches the best available price (a price favorable to the user), the limit order will execute immediately.
For example:
Buy order = Order price is higher than the best available sell price
Sell order = Order price is lower than the best available buy price

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HashKey Global Team

Take Profit and Stop Loss Rules
HashKey Global offers two types of take profit and stop loss modes for users:
  1. Position Take Profit and Stop Loss
  2. Entry Take Profit and Stop Loss

Position Take Profit and Stop Loss:

This mode allows users to set take profit and stop loss for their current positions, which acts as a close order.
  • You only need to set the trigger price and the corresponding trigger price type; there is no need to specify the quantity.
  • When triggered, the entire quantity of the current position will be closed at market price. If there are existing close orders, those will be canceled, and the entire quantity will be closed at market price. If some orders fail to cancel due to exceptions, the maximum quantity that can be closed at market price will be executed.
  • Only one take profit and one stop loss order can be set for each position.
  • Note: The system monitors the position to place profit and stop-loss orders. If the position no longer exists, the system automatically cancels the corresponding take-profit and stop-loss orders.

Entry Take Profit and Stop Loss:

This feature allows users to set the entry price, take profit price, and stop loss price before opening a position. There is no need to monitor whether the position is filled constantly. Once the order is filled, the system will automatically set the take profit and stop loss for this position, thus securing profits or mitigating risks.

Main Differences between Position Take Profit and Stop Loss and Entry Take Profit and Stop Loss:

 
Difference
Position Take Profit and Stop Loss
Entry Take Profit and Stop Loss
Set timing
Set after having a position
Set before opening a position
Lock Position
Position Take Profit and Stop Loss: Yes, the order quantity changes with the position size changes and closes the entire position.
Entry Take Profit and Stop Loss: No, the order quantity does not change with the position size changes and triggers closing based on the initial entry quantity.
Support Limit Price
Position Take Profit and Stop Loss: No, defaults to closing the entire position at market price.
Entry Take Profit and Stop Loss: Yes, limit price and market price options are available.
 
Order Status
Position Take Profit and Stop Loss: After setting, the take profit and stop loss orders are directly created.
 
Entry Take Profit and Stop Loss: If the entry order is filled, the take profit and stop loss orders are automatically created. If the entry order is still pending, the take profit and stop loss orders will not be created and will not be shown in the order list as they are not yet effective.
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Futures Product Introduction

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GlobalOps

HashKey 101: Understanding Margin Modes: Isolated vs. Cross Margin
img_v3_02i5_8e0f500e-3050-45f6-99c7-37e8052118hu.jpgIn futures trading, the mode you choose affects how risks and capital are managed. Let’s break down the key differences between Isolated Margin and Cross Margin modes.
 

Isolated Margin Mode

Each position has its own dedicated margin. For example, you open a BTC/USDT long position worth $1,000 and assign $100 as margin to this position in Isolated Margin Mode.
 
If the position incurs a loss, only the $100 margin is at risk. If liquidation occurs, it will only affect this position, and other trades remain untouched.
 
Pros:
  • Independent risk control: Liquidation of one position won’t impact others.
  • Clear P&L: Gains or losses are isolated per position.
Cons:
  • Requires active margin management for each position.
  • Lower capital efficiency since funds are locked individually.
 

Cross Margin Mode

Shares margin across all open positions in the same account. For example, you have $5,000 in your account and choose to open two positions: BTC/USDT long: $2,000; ETH/USDT short: $1,000. Both positions share the $5,000 margin.
 
If the BTC trade incurs a loss, the system uses funds from your remaining margin to keep it open. However, if total losses exceed the margin, your account will be liquidated.
 
Pros:
  • Higher capital efficiency: Funds are shared across all positions.
  • Simpler to manage: No need to assign margin manually.
Cons:
  • Higher risk: Losses in one position can drain the entire account.
  • Harder to control risk for individual positions.
 

Which Should You Choose?

Choose Isolated Margin if:
  • You want to limit risk for specific trades.
  • You are trading in volatile markets and prefer controlled losses.
 
Choose Cross Margin if:
  • You are confident in your strategy and want higher capital efficiency.
  • You prefer simplicity in managing multiple trades.
 

Summary

  • Isolated Margin: Best for risk-averse traders focused on protecting their account.
  • Cross Margin: Ideal for risk-tolerant traders aiming to maximize capital usage.
 
Trade smart, and always choose the margin mode that aligns with your strategy!
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HashKey Global Team

HashKey Futures Trading 101: Your Step-by-Step Guide to Futures Trading

Step 1: Open your futures account

Log into your HashKey Global account and complete KYC verification. For a step-by-step guide to registration and KYC, please visit our Discord community.
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After KYC verification, click on "Open Futures Account" and select "Apply now".
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Select the default leverage and click "Continue".
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Complete and submit survey to test your futures trading knowledge and risk tolerance.
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You are now ready to start your futures trading journey!
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Step 2: Transfer funds

Go to "Assets", select "Futures Account", and then "Transfer".
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Select the currency and the quantity of the assets you wish to transfer, then click "Confirm".
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Step 3: Open positions
Firstly, select the pair you want to trade.
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Choose the margin mode (cross margin/isolated margin) based on your risk preference. Details of the margin types can be found in the top right corner of the trading page. Currently, only cross margin is available; isolated margin will be available soon. Please stay tuned!
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Select Limit Price/Market Price/Trigger order based on your preferences, set the value of your order, then choose Long/Short position.
 
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Step 4: Close positions

View all your opened positions in "Positions". Choose either market price or limit price to close the position. If you have multiple opened positions, you can also select "Close All Positions".
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FAQs:

How to calculate the PNL?

PNL = (mark price - entry price)*quantity
 

How to check if you have sufficient margin balance to prevent liquidation?

You can check your positions' MMR in "Positions". The smaller the MMR, the less risky the position is for liquidation. Once MMR reaches 100%, liquidation will occur.
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How to check futures order records?
Select "Order History" to view your orders. If the orders are more than 6 months old, select "All Orders".
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You can see details of your fees, funding fees, ADL, or liquidation in "Transaction History".
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How to share my ROI ?

In "Positions", click the share button to showcase your ROI!
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HashKey Global Team

Perpetual Futures Overview
Perpetual Futures are a type of digital asset derivative product that allows users to speculate on the rise or fall of a contract's price. Users can go long (buy) or short (sell) on a contract to profit from a digital asset's price increase or decrease. Choosing to go long indicates that the user expects the future price to rise in the future. Conversely, choosing to go short indicates that the user expects the future price to fall. Perpetual futures have no expiration date and can be held indefinitely. 
 

Trading Rules

Trading Time

Perpetual futures support 24/7 trading and settle in real time.
  • 00:00 (UTC+8)
  • 08:00 (UTC+8)
  • 16:00 (UTC+8)

Types of Trades

Trades are classified into two types: opening and closing positions. Each type can be further divided into buy and sell directions:
  1. Buy to Open Long (Bullish): When a user is bullish and expects the index to rise, they buy a certain number of contracts, increasing their long position.
  2. Sell to Close Long: When a user no longer expects the price to rise, they sell their long contracts to exit the market, decreasing their long position.
  3. Sell to Open Short (Bearish): When a user is bearish and expects the index to fall, they sell a certain number of contracts, increasing their short position.
  4. Buy to Close Short: When a user no longer expects the price to fall, they buy contracts to offset their short position and exit the market, decreasing their short position.

Positions

After opening a position, the user holds a position in the same direction. Positions of the same type and direction will be merged. For example, if a user first opens one BTC perpetual future and then opens two more positions, the position will show three BTC perpetual futures in total, not separately. The cost for closing a position is calculated using the moving average method, meaning the cost price for calculating gains or losses is based on the average entry price.

Notes

  1. Leverage can only be switched for active contracts.
  2. Leverage cannot be switched if there are open limit or conditonal orders for the contract.
  3. Leverage can only be switched to available leverage multiples for the user.
  4. Switching leverage is not allowed if it causes the account's available margin to fall below zero.
  5. Switching leverage is not allowed if it causes the account's margin rate to be less than or equal to zero.
  6. Switching leverage may fail due to the contract being inactive, insufficient margin, network issues, or system problems.

Order Types

  1. Limit Order: Users specify the price and quantity for their order. The order will be matched based on price and time priority rules. If the user’s buy price is higher than the market price or the sell price is lower than the market price, the order will be executed at the market price that benefits the user. Limit orders can be used for both opening and closing positions. They can choose from three time in force(TIF): "Post Only," "Fill or Kill," and "Immediate or Cancel." If no TIF is selected, the default is "Good Till Cancelled."
  2. Conditional Order: Users can pre-set trigger conditions and the order price and quantity. When the market price reaches the trigger condition, the system will place the order based on the pre-set price and quantity (i.e., a limit order).
  3. Market Order: When placing a market order, users only input the order quantity without specifying the price. The system will read the latest market price when the order is received and place a limit order at that price.
  4. Take Profit/Stop Loss: These are pre-set orders with trigger conditions (take profit or stop loss prices) and order prices. When the market price reaches the trigger condition, the system will place the order based on the pre-set price and quantity, achieving the goal of taking profit or stopping loss.

Leverage

Perpetual futures support leverage ranging from 1x to 10x.
These mechanisms provide users with flexible and diversified trading options, allowing for strategic investment in response to market fluctuations.
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HashKey Global Team

Cross Margin and Isolated Margin Mode:
In perpetual Futures, cross margin and isolated margin refer to the ways in which users need to pay margin when opening or closing positions.
 
Cross margin refers to using all assets in the Futures account, including position margin, order margin, and unrealized P&L, as account margin. The advantage is that users' funds are shared, and there's no need to allocate margin separately for different currencies or Futures directions. However, the risk lies in the fact that in the event of liquidation, the entire account's assets and other positions will be liquidated.
 
Isolated margin means that when a position is opened, the margin injected for this position is only used for this specific position. Therefore, if one position is liquidated, it does not affect other positions, even if they are in different currencies or directions.
 
Currently, HashKey Global perpetual Futures only support cross margin mode. Isolated margin mode is coming soon.
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HashKey Global Team

What is Position Margin?

Account Margin:
The total margin of the account, including available margin, used margin, and unrealized P&L.

 

Available Margin:
The portion of the margin that can be used for opening new positions.
Available Margin = Wallet Balance + Unrealized P&L in Cross Margin - Used Margin

 

Used Margin:
Margin used for open orders = Order Price * Order Quantity / Leverage
Margin used for open positions = Average Entry Price * Position Quantity / Leverage

 

Account Maintenance Margin:
The sum of the maintenance margin for all positions. When the total maintenance margin equals the account margin, a forced liquidation is triggered.
∑Total Maintenance Margin = Average Entry Price * Position Quantity * Maintenance Margin Rate

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HashKey Global Team

Perpetual Futures: What are Makers and Takers?

Orders created by market makers are placed in the order book for buying and selling, rather than being executed immediately. For example, if a limit order is created to sell 1 BTC when the price reaches $50,000, these orders provide liquidity to the market, allowing other traders to more easily buy or sell BTC immediately when conditions are met. Traders who buy or sell immediately are called takers. In other words, takers are the ones who execute orders created by makers.

 

Takers:
If an order is immediately executed before entering the order book, you are a taker. This is the case whether your order is partially or fully executed.
Trades from market orders are always considered taker trades because market orders never appear in the order book. Instead, they are executed directly based on the conditions set by the opposing party, making them taker trades.
Immediate or Cancel (IOC) and Fill or Kill (FOK) orders also fall under taker orders.

 

Makers:
When you place an order, either partially or fully, that enters the order book (e.g., a limit order), any subsequent trades from that order will be maker trades.
Note:
Good 'Til Canceled (GTC) orders can be traded as both taker and maker orders.
Using limit orders does not guarantee that your order will be a maker order.
If you want to ensure that your order enters the order book before being executed, select "Post Only" when placing your order.

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Spot Trading Guide

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HashKey Global Team

How to start spot trading in HashKey Global?

 

1.Please log into your HashKey Global account and click on Spot.
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2.It will lead you to the spot trading page as shown below.
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From the above trading page, you will be able to find the following:
  • Trading pair to selet
  • Trading indicators for the past 24 hours including the lowest price, highest price and trading volume of the token
  • Price chart
  • Buy/Sell orderbook
  • Buy/Sell order place section
  • Order history
 
3.Let's take BTC/USDT trading pair, for example.
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Firstly, go to the BTC/USDT trading pair, then go to the buy/sell section to place the buy or sell order using market or limit order.4.PNG
Once you click on confirm, the completed order will show up in your order history. If the limit order is not completed and pending to be filled, it will show up in your open order records.
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4.How to check and calculate the fee of the completed transaction?
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You can go to transaction details to see the service fee details.
In the meantime, you can refer to the following link for more details of how the spot trading fee is charged.
https://global.hashkey.com/en-US/support-fee
 
If you still have further confusion, feel free to reach our customer support team via livechat or email at support@global-cs.hashkey.com.
 
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HashKey Global Team

HashKey Global Spot Trading Rules
To protect traders from market manipulations, HashKey Global implements the following order execution limits for spot trading.
 

Price Limit

 
For Market Order:
If the estimated filled price deviates by more than a certain percentage from the last traded price, the market buy order will be partially executed. Any remainder of the order exceeding the limit will be canceled.
 
For example, assuming the market order limit for BTC/USDT pair is 10%, if the last traded price is at 30,000 USDT, a user places a buy ( or sell) market order for 100,000 USDT. Any portion that could have been filled at a price above 33,000 USDT for buy order (or below 27,000 USDT for sell order) will be cancelled. Assuming only 80,000 USDT order value can be filled at a price below 33,000 USDT for buy order (or above 27,000 USDT for sell order), the remaining 20,000 USDT order value will be cancelled.
 
For Limit Order:
If the order price of a buy order or a sell order deviates from the Last Traded Price by a certain percentage, the order won’t be executed. For example, if the limit is 10%, the order price of your buy order cannot exceed 110% of the Last Traded Price, while the order price of your sell order cannot be lower than 90% of the Last Traded Price.
 
Order Placing Restriction for New Pair Listing:
Note: For the first five (5) minutes
 
For Market Orders: The price limit of market orders for the first 2 hours of the listing is set at 50%, and will be resumed to 10% after 2 hours.
 

If the user chooses to place an order at the counterparty price, the user only enters the order quantity and cannot enter the order price. The system will read the latest counterparty price (if the user buys, the counterparty price is the sell 1 price; if it is a sell, the counterparty price is the buy 1 price) at the moment of receiving this order and issue a limit order for this counterparty price.

 
For Limit Orders: Within the first five (5) minutes, the order price of your buy and sell orders cannot exceed 3000% of the listing price. This limit may change based on market conditions. The price limit of market orders for the first 2 hours of the listing is set at 50%, and will be resumed to 10% after 2 hours.
 
The user needs to specify the price and quantity of the order. The limit order stipulates the highest price the user is willing to buy or the lowest price the user is willing to sell. After the user sets the limit price, the system will match the transaction according to the rules of price priority and time priority; if the user sets the buy price higher than the market price or the sell price lower than the market price, the market will prioritize the transaction at a price that is favorable to the user.
 

Order Limit

HashKey Global imposed a minimum and maximum order quantity and value for each order. For example, the minimum order value for BTC/USDT per order cannot be less than 10 USDT and the maximum order value cannot exceed 200,000 USDT per order.
 

How to View the Spot Trading Limit

To view the Price limit and Order Limit for the respective spot trading pair, please visit Fee Rates and Trading Parameters.
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