The Complete Guide to XXKK USDC-Margined Futures

If you are very interested in futures trading, then XXKK USDC-Margined Futures is one of the best entry points for beginners to understand cryptocurrency derivatives. Below, we will explain everything you need to know about USDC-margined futures and how to get started.

XXKK USDC-Margined Futures

What is Margin Trading?

Before understanding XXKK USDC-Margined Futures, you need to first understand the principles of margin trading. Essentially, margin trading means that users borrow funds from a bank or broker to invest, including cryptocurrency investments. Users need to first deposit and pledge, after which the lender will provide the part that the user wants to invest but lacks the funds for. Through this method, investors can amplify their investment capacity even if they do not have much capital on hand, thereby earning more profits. However, users should also note that while potential gains are amplified, potential losses are also amplified.

There are generally five types of margins: Initial Margin, Maintenance Margin, Variation Margin, Available Margin, and Risk Margin. Initial Margin is the basic net margin required by investors to open a position. Maintenance Margin determines the amount of margin investors need to keep in their account to keep the position open. Variation Margin is the difference between the initial margin and the current margin in the account. When a margin call occurs (account balance is lower than the maintenance margin), variation margin is used. Available Margin is the margin in the investor's account that can be used to open more positions. Risk Margin is determined by the maximum risk level the investor is willing to bear, reflecting more clearly the investor's delivery obligations.

In addition to the five types of margins, there are two margin modes: Isolated Margin mode and Cross Margin mode. Isolated Margin mode allows users to allocate a specific margin amount to a single open position, while Cross Margin mode sets up a unified variation margin pool for all positions. In practice, Isolated Margin is more suitable for higher-risk positions because even if a loss occurs, the loss is limited. By contrast, if the user does not need to frequently revalue the position and perform position management, Cross Margin offers greater flexibility.

While investing via margin can be very profitable, users still need to pay attention to potential margin calls. A margin call occurs when the user's account balance falls below the required balance. Users need to cover the shortfall within a limited time, otherwise the exchange will close the user's current position until the account balance meets the minimum requirement again. If the user does not want to deposit more funds, they can also close some less profitable positions to meet the minimum requirement.

Futures and Perpetual Contracts

Now that the margin has been introduced, we can see what contracts are. A futures contract is a legal agreement allowing investors to buy a predetermined amount of an asset at a predetermined price at a specific time in the future. Investors can trade in the market even without holding any underlying assets. Unlike traditional futures contracts, cryptocurrency futures are usually perpetual contracts with no clear delivery deadline. Therefore, investors can open a position at the set price and close it when a specific type of asset reaches that price, without needing to consider the time spent.

It is important to note that if users want to keep positions open, they need to pay funding fees in a peer-to-peer format. Since futures contracts have no clear delivery date, the market needs to calculate traders' profits and losses every eight hours and collect funding fees to ensure that the futures contract price remains close to the crypto spot price. Funds will be transferred between the buyer's and seller's accounts of the contract. Therefore, while users can keep futures contracts open indefinitely, they still need to consider the issue of funding fees during that period.

Trading USDC-Margined Futures on XXKK

Supported Trading Pairs

Currently, XXKK supports Bitcoin and Ethereum perpetual contracts as trading pair options for XXKK USDC-margined futures. For Bitcoin, you can use up to 125x leverage; for Ethereum, up to 100x. All losses and fees will be settled in USDC.

Step-by-Step Guide

Trading USDC-margined futures on XXKK is very convenient and simple. Users can follow the steps below to start trading.

• When you come to the XXKK homepage or App, navigate to “USDC-margined futures” via the top menu. Log in to your account using your XXKK ID and password, then transfer funds to your futures account. This step incurs no fees.

  
  

• Open a position to start trading. Here, users can select their preferred trading pair, margin mode as well as leverage multiplier, contract price, quantity, and direction (long or short position).

  
  

• Once the order is successfully placed, users can monitor and manage it in the “Current Orders” section. Users can adjust leverage or close the position based on profit and loss, which can be done under “Realized/Unrealized PnL”. The status of closed positions is displayed under “Transaction Details”. Of course, users can also close positions manually. Flash order mode closes the entire position, while limit order mode closes part of the position. The closing operation can be withdrawn before the transaction is completed.

Leverage and Risk Management

USDC-margined futures, like other forms of investment, carry certain inherent risks. XXKK recommends users trade with caution and rationally use risk management strategies. As profit and loss are settled in real-time, XXKK users will receive the latest and most accurate data based on current market conditions.

Users can also adjust the margin mode through the methods mentioned above to better manage risks, thereby reducing the probability of liquidation. When a margin call occurs, traders must meet the initial margin requirement within the specified time to keep the position open. You can meet the requirement by depositing more margin into your account or closing some positions.

In Isolated Margin mode, if the sum of the isolated account balance and the position's unrealized PnL is less than the maintenance margin, then the 100% margin rate position will be liquidated. In Cross Margin mode, if the total account balance (excluding the balance in Isolated Margin mode) and the unrealized PnL of all positions is less than the maintenance margin, then the 100% margin rate position will be liquidated.

If a margin call situation still exists, users can reduce losses through three strategies. First, users can cancel orders. The system will automatically stop all open and close position orders. Second, users can cancel all two-way position mode orders for all trading pairs. Third, users can lower the leverage level by two levels. Please note that the latter two strategies will not affect positions in Isolated Margin mode.

When the user executes risk mitigation strategies, other operations will be suspended until the strategy is completed.

Why Choose XXKK for Trading USDC-Margined Futures?

XXKK is a recognized leader in the cryptocurrency derivatives market in terms of liquidity and global open interest. XXKK is committed to lowering the entry barriers to the crypto world and the contract trading field. The product design of XXKK aims to improve and perfect the user experience. Because of the efforts and dedication of XXKK, there are already more than 2 million loyal users from 48 countries around the world following XXKK. As of February 2022, the derivatives trading volume of XXKK was 8.69 billion USD, and at the same time, XXKK received 12 A+ ratings from SSL Labs and ranked tenth in the exchange cyber security ranking of Crypto Exchange Ranks. We provide industry-leading security guarantees through the built-in autonomous DPI defense system, the in-house developed wallet early warning system, and the support from leading security companies such as Suntwin Technology, Armors, HEAP, etc. If users have any questions, XXKK provides 24/7 multilingual customer service.