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TruBit Pro is one of the first trading platforms in the industry to provide Perpetual Contract trading services. Perpetual Contract, also known as the Quanto Swap, allows users to hold multiple digital assets and use them as margin to trade various derivatives contracts on the platform.
First-generation products are standard in crypto exchanges.
Second generation products are only found in select crypto exchanges.
The third generation product, perpetual contract, is the general trading mode among the major cryptocurrency exchanges.
► Comparison of three contract types
The perpetual contract provides traders with greater flexibility and makes it easier for traders who do not hold BTC pairs to trade multiple contracts simultaneously. It also supports USDT currency as a margin asset to meet the needs of traders who adapt to the USD standard and thus earn more profit.
► Traditional Contract Process VS TruBit Pro's Perpetual Contract Process
Example: A trader holds BTC and is optimistic about the price of BTC over the long
*term,* *but recently ETH has been experiencing positive momentum.*
Like BitMEX's ETH/USD perpetual contract, TruBit Pro's perpetual contract is a dual-currency trading product with conversions between three digital assets.
The image below shows that the ETH/USDT perpetual contract takes USDT as its base and settles in one of those three currencies: BTC/ETH/USDT. Users can also trade five contracts simultaneously if they have enough settlement currencies.
In margin trading, traders can effectively trade with a notional amount, investing a relatively small capital as collateral to multiply profits and potential risks.
Maximum leverage available of TruBit Pro Perpetual Contracts
Well-developed exchanges in the sector have structured systems for risk control. In the case of a high market fluctuation (such as the Black Thursday crisis), leveraged positions may face an unexpectedly large drawdown due to inadequate risk control. Therefore, we recommend that traders set the appropriate leverage according to their risk appetite and combine the exchange's risk control mechanism to establish a stop profit or loss position in advance to avoid unnecessary losses.
***"Close to the average spot price, avoids***
***possible market manipulation activities"***
In a highly volatile market, a highly leveraged position can face liquidation if the required margin is insufficient in time. Most exchanges no longer use the last trading price as the basis for calculating the liquidation but instead use the "index price" of the spot market to avoid a "flash crash" in large liquidations. To avoid manipulative market activities and to limit unnecessarily forced settlements when the market fluctuates significantly concerning the overall spot price, the index price is calculated by taking the average value of the spot prices of several exchanges.
The TruBit Pro index price is taken from 5 major spot exchanges and applies dynamic algorithms to eliminate abnormal data sources in real-time. Data standardization provides a rich and reliable source of indices for contract trading.
► Index Price Comparison among Exchanges
***"Same Maker Rates, but lower Taker Rates"***
Maker and taker fees are crucial elements to consider when executing an operation. The lower the commission, the greater the attraction for users. In a transaction, Maker (who provides the liquidity) and Taker (who takes the order). Since the Maker is the party that provides liquidity and the Taker takes it, the Taker's fee is usually higher than that of the Maker.
Perpetual Contract Rates in Different Exchanges
As can be seen in the chart above, 0.02% is the average Maker Rate, while the Taker Rate varies from exchange to exchange. Among them, TruBit Pro is at the lowest level.
The price of the Perpetual Contract calculates from the spot price by adding the funding rate, also known as the interest rate. As in almost all exchanges, the funding payment interval in TruBit Pro is 8 hours, i.e., funding charging is three times a day. When the user holds a position at the mark time, he has to pay (receive) the fees to (from) the counterparty in the trade. If the user does not hold any position at that time, he does not have to make (receive) payment.
As the market is often volatile, it is common for some investors with huge leveraged positions to face forced liquidation, affecting others and causing market-wide self-de-leverage. To protect these users from such problems, TruBit Pro uses a double risk limit, which limits both the specific Contract and the target account.
► Risk Limits on TruBit Pro Perpetual Contract
► Risk Limits of TruBit Pro Settlement Account
Based on this comprehensive risk control measure, when placing an order, the TruBit Pro system will check the risk limit of the contract and the settlement account. If the risk limit or the settlement account crosses the safe area, TruBit Pro will not allow users to place the order.
The double risk limit method limits accounts for high-leverage positions. It fundamentally solves the problem of "flash crashes" caused by large-scale forced liquidation, which helps to raise price stability by eliminating noises in the market.
TruBit Pro provides different order placement methods; traders can place orders at market or limit prices. In addition, some advanced order types exist, such as post only, stop limit, stop market, etc. All these function designed to meet different needs in trading:
A market order is an immediate order to buy or sell assets at the best price available in the market. In TruBit Pro, you can easily find the "Market" option in the order panel and then place a market order.
For a limit order, you can require a specific target price. We execute the order only when this limit price reaches out, or a better price exists.
When you select [Post Only] and place an order, it will not execute immediately with existing orders in the order book. It will exist as a Maker order in the market, and when completed, the trader will pay the trading fee under the maker rate, not the taker rate, which provides liquidity to the market and allows users to trade at a lower rate.
Taker Rate: 0.04%
Maker Rate: 0.02%