#风险管理 #风险保障基金 #合约爆仓 Essential knowledge for trading contracts! Can't understand the Contract Risk Protection Fund? How to recover losses from abnormal liquidation? Let me explain the Contract Risk Protection Fund in simple terms:
😅 As per usual, let's start with a summary:
This fund is designed to prevent traders from being affected by others' liquidations in extreme situations, while also ensuring the smooth operation of the market.
1. What is the Contract Risk Protection Fund?
It is a security mechanism designed to protect traders from losses due to the liquidation of counterparty positions. For example, if someone loses all their money trading on margin, the remaining traders cannot receive their entitled profits; at this point, the fund will step in to cover the gap, ensuring everyone receives their profits normally.
2. How does the fund operate?
If a trader's margin is insufficient to maintain their position, their position will be forcibly liquidated. After forced liquidation, if their account still owes money or cannot normally close the position, this position is called a 'bankrupt position.' The Risk Protection Fund will take over these bankrupt positions and use the fund's money to cover the losses.
3. How is the fund size determined?
The size of each fund is adjusted as needed to ensure there is enough money to address potential losses from bankrupt positions. It will refer to historical data from some extreme market situations and set a safety probability of up to 99.9% for calculations. The fund size will be reassessed quarterly or as necessary.
4. Where does the fund's money come from?
When a trader's position is forcibly liquidated, part of the fees paid will be allocated to the fund account. If the bankrupt position still has residual profits, this portion will also belong to the fund. If the fund balance is insufficient, the platform will inject capital to make up the shortfall or allocate resources between different funds.
5. What if the fund is insufficient?
If the fund is still not enough to cover the losses of bankrupt positions, the platform will handle it through an 'automatic position reduction' mechanism. This means that according to certain rules, some profitable traders' positions will be forcibly liquidated to fill this gap.
6. How are different contract funds managed?
USDT-based contracts for the same type of asset (e.g., BTC, ETH, etc.) share a single fund. Other similar contracts (e.g., USDC-based and coin-based contracts) will also each have an independent fund allocated, without interfering with each other.
7. Fund balances are public and transparent
All fund balances and operation records can be viewed through the trading interface to ensure transparency.
View various funds:
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