Futures Trading
Futures trading is a type of financial derivative. Compared to spot trading, futures trading allows investors to gain (more) profit through going long, going short, and using leverage.
Long/Short
In spot trading, investors can only wait for the value of the asset to increase to earn a profit. In futures trading, however, investors can earn from both directions by going long or going short.
- Long: Refers to when investors buy futures because they are optimistic about the market and expect the price to rise. They buy a certain quantity of assets at the current price and sell them at a higher price once the price increases, thus earning a profit from the price difference. This is a buy-first, sell-later trade.
- Short: Refers to when investors buy futures because they believe the current price is too high and they are bearish on the market, expecting the price to fall. They sell their assets at the current price and buy them back once the price drops, earning a profit from the price difference. This is a sell-first, buy-later trade.
JuCoin Futures Trading Steps
After logging into your JuCoin account, transfer funds to the futures account as margin.
Step 1: Choose a futures trading pair, such as BTCUSDT, ETHUSDT, etc.
Step 2: Confirm the margin mode (Cross Margin/Isolated Margin) and set leverage.
Step 3: Choose the order type and customize the order details.
Step 4: Choose long/short and place the order.
Calculating Return on Investment (ROI)
U-based Futures
Using the latest price as the price base:
- Unrealized PnL (Profit and Loss) = Future Value * Position Size * Order Direction * (Latest Price - Opening Price)
- ROI = Unrealized PnL in USDT or USDC / Opening Margin
ROI = ((Latest Price - Opening Price) * Order Direction * Position Size) / (Position Amount * Future Multiplier * Mark Price * IMR)
Where:
- Order Direction: 1 for buy (long), -1 for sell (short).
- Transaction Fees: These are influenced by whether the user is a Taker or Maker and the corresponding fee rates.