Important formulas for Futures Trading
23-12-2022

Dear Nami Community,

Futures trading is considered as one of the complex types of trading with many indicators and specific formulas, in order to answer questions from the user community and provide more useful information for users in trading Nami Futures and NAO Futures, Nami Futures would like to summarize the formulas of important indicators for Futures trading as follows.


  1. PnL (Profit)

The profit formulas with Futures trading are:

With Long position

  • Option 1: Profit = (Close Price - Open Price) x Positions Size - Trading Fee
  • Option 2: Profit = (Close Price - Open Price) / Open Price x Opening Volume - Trading Fee

With Short positions

  • Option 1: Profit = (Open Price - Close Price) x Positions Size - Trading Fee
  • Option 2: Profit = (Open Price - Close Price) / Open Price x Opening Volume - Trading Fee

Note:

  • When users use assets other than the base asset of VNDC or USDT as transaction fees (such as NAMI, NAO or ONUS), the transaction fee will no longer be included in the Position Profit.
  • Opening Volume = Opening Price x Position Size
  • Closing Volume = Closing Price x Position Size

2. PnL Percentage (%PnL)

PnL Percentage = PnL / Margin x 100%


3. Trading Fees

Trading Fees = Fee Rate x Open and Close Position Volume

Tip: Depending on the assets the user uses to charge the fee, the fee rate will range from 0.036% to 0.06%. With Nami Futures: 0.036% (NAMI), 0.06% (VNDC and USDT), with NAO Futures: 0.036% (NAO), 0.045% (NAMI, ONUS), 0.06% (VNDC and USDT)


For example:

The user places a Long position with the BTC/VNDC pair at the Opening Price of 350,000,000 VNDC and the Closing Price at 400,000,000 VNDC. Position Volume is 35,000,000 VNDC (ie, position's size is 0.1 BTC), Leverage x10 and Margin is 3,500,000 VNDC, users use VNDC as fees.

Then:

Transaction fee = 0.06% * (350,000,000 + 400,000,000) = 450,000 VNDC

Profit = (400,000,000-350,000,000) * 0.1 - 450,000 = 4,500,000 VNDC

Profit Ratio = 4,500,000 / 3,500,000 * 100% = 128.57%


4. Activation Price

The activation (trigger) price is the price at which pending orders will be triggered, including open pending orders (limit orders), pending orders to close (SL-TP), add volume limit orders, closed partial position limit orders...

This Activation Price is regulated by the following indicators:

  • Minimum activation price: is the minimum activation price that can be set
  • Maximum activation price: is the maximum activation price that can be set
  • Price Gap Ratio: the ratio of the minimum difference between the trigger price and the market price at the time of setting

For example:

The BTC/VNDC trading pair has a market price of 390,000,000 VNDC, with the trading rules on the Activation Price as follows:

  • Minimum activation price: 195,000,000 VNDC
  • Maximum activation price: 789,000,000 VNDC
  • Price Gap Ratio: 0.07%

At that time, the minimum price gap will be 0.07% * 390,000,000 = 273,000 VNDC, users need to set the activation price not to differ by more than 273,000 VNDC from the market price, ie no more than 390,000,000 - 273,000 = 389,727,000 VNDC and not less than 390,000,000 + 273,000 = 390,273,000 VNDC

As such, users will need to set trigger prices for pending orders in the following price ranges:

195,000,000 < Activation price < 389,727,000; and

390,273,000 < Activation Price < 789,000,000


5. Liquidation Fee

Liquidation Fee, whose full name is Liquidation Premium, is the cost the user incurs when a position is liquidated to cover the account short in case the Futures account balance is below zero (negative account balance). account). This fee is charged in addition to the position's margin and will be deducted directly from the Futures account balance.

Tip: Trading position will be liquidated when Negative Profit exceeds Margin

Liquidation fee = Liquidation fee rate * Position volume at closing

Note: Currently Nami Futures is applying a 1% liquidation fee rate to all trading contracts.

For example:

User has a Short position with BTC/VNDC pair with Volume at Opening is 40,000,000 VNDC and Volume at Closing is 35,000,000 VNDC.

Then:

Liquidation fee = 35,000,000 * 1% = 350,000 VNDC


Further information:

Best Regards,


Nami reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice.

Risk Warning: Futures trading carries substantial risk and the possibility of both significant profits and losses. Past gains are not indicative of future returns. All of your margin balance may be liquidated in the event of extreme price movements. The information here should not be regarded as financial or investment advice from Nami. All trading strategies are used at your discretion and your own risk. Nami will not be liable to you for any loss that might arise from your use of Futures.


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