How to Trade on Cryptology
Web Version – www.cryptology.com
Step 1: Click on the “Exchange” tab to start.
Step 2: Left next to the Price Chart and Market Depth sections you can find two types of orders:
Let’s start with a Market one. Choose an asset and a preferred amount that you want to buy or sell and click on the BUY/SELL button.
Please note that you should have a sufficient amount of currency on your balance that you want to exchange. You can check this on the Balances tab.
(Note: The percentages under the “Total” box refer to certain percentages of the account balance.)
Step 3: A Limit Order does not work immediately as the Market one, but executes at a specified price. A Buy Limit Order can only be executed at the limit price or lower, and a Sell Limit Order can only be executed at the limit price or higher. So it is not guaranteed that it will be executed, as it depends on the market price.
Step 1: Click on the “Exchange” tab to start.
Step 2: Let’s start with a Market Order. Choose an asset and a preferred amount that you want to buy or sell and click on the “BUY/SELL” button.
Step 3: A Limit Order does not work immediately as the Market one, but executes at a specified price.
A Buy Limit Order can only be executed at the limit price or lower, and a Sell Limit Order can only be executed at the limit price or higher. So it is not guaranteed to be executed, as it depends on the market price. So choose a currency pair you wish to use, set the Limit Price and click on the “Apply” button to open your Limit Order.
What is the order book?
Order book is a list of buy and sell orders for a specific currency, organized by price level. It allows you to see what price are investors willing to pay or sell their coins for.
What are the Ask and Bid prices?
The Ask Price is the lowest price that sellers are willing to sell their coins for. In reverse logic, the Bid Price is the highest amount a buyer is willing to pay for the asset. The difference between the two is commonly known as Spread.
What is the minimum order size?
The minimum order size on Cryptology is USD $0.10 or its equivalent.
Why was my market order executed at a different price?
On a highly volatile market, an order might be executed at a price that is different than expected. Lets see an example.
If bid-ask spread on BTC-EUR pair is €3460 by €3469, and you place a market order to buy 1 BTC, you may expect it to fill at €3469. In the fraction of a second, it takes for your order to reach the exchange something may change, or your quotes could be slightly delayed. The price you actually get maybe €3462. The €2 difference between your expected price of €3460 and the €3462 price you actually end up buying at is called slippage.
Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility when market orders are used. A market order assures you get into the trade, but there is a possibility you will end up with slippage and a worse price than expected.
Slippage does not directly refer to a negative or positive movement, as any change between the expected and actual prices can qualify. When orders are executed, the corresponding securities are purchased or sold at the most favorable price available. This can cause an order to produce results that are more favorable, equal to or less favorable than original expectations with the results being referred to as positive slippage, no slippage and negative slippage, respectively.
What is Tether (USDT)?
Tether is a cryptocurrency that was created with the intent of mirroring the US Dollar. It is meant to be traded at a fixed price of USD ($1). Each Tether is allegedly backed by 1 real Dollar, that’s held in the company’s reserve.
There is also a form of Tether that is backed by the Euro, even though it has an extremely low trading volume.
How to make an Order
Step 1. Go to Futures Contracts trading page
Step 2: Choose an asset, choose the size of the contract you want to buy. Then, press “Long/Buy” if you want to buy Bitcoin or press “Short/Sell” if you want to sell it.
Congratulations! Your order has appeared at the bottom!
- Cryptology Perpetual Futures Contract: Our Perpetual Futures Contract is a derivative contract bonded to the price of the BTC price index as the underlying.
- Index price: the Index Price is the average market price of different exchanges. The exchanges used for the Index Price are independent in order to avoid price manipulation.
- Funding Rate: The Funding Rate, determines funds that will be received or marked off every 8 hours at 04:00 UTC, 12:00 UTC and 20:00 UTC. So we have 3 funding intervals per day. You will only pay or receive the Funding amount if you hold a position at one of these times. If you close your position prior to the Funding Rate exchange then you will not pay nor receive the Funding Rate. When the Funding Rate is positive, longs pay shorts. When the Funding Rate is negative, shorts pay longs. Cryptology does not charge any fees on the Funding Rate amount nor the exchange of it between longs and shorts, the Funding Rate is exchanged directly peer-to-peer. The Funding, is necessary to maintain the contract price close to the Index Price and avoid price manipulation on the exchange.
- Mark Price:the Mark Price displays the Unrealized PNL. It is used to calculate the liquidation of the position and avoid price manipulation.
- Mark Price = Index Price * ( 1 + Funding Rate * (Time to Funding / Funding Interval))
- Open interest: total number of contracts in the order book.
- Total balance: overall valuation of clients assets.
- Equity: is a sum of total balance and Unrealized PNL.
- Available: available assets on balance that could be used for trading.
- Initial Margin: the amount that is necessary to enter into a leveraged position.
- Maintenance Margin: Maintenance Margin is 50% of the Initial Margin. When your Margin becomes less than the Maintenance Margin, the position will be closed using the liquidation procedure.
- Unrealized PNL: PNL that is calculated as a difference of the average price of a deal and the Mark Price.
- Realized PNL: Realized PNL is calculated using the average price of opening position and the average price of the closing position.
- Est. Liq. Price: it is an approximate price for liquidating the position. If the Mark price touches the Liquidation Price, the position will be liquidated.
- Liquidation price: is the price which will be used to close the position in the case of liquidation.
How is the Funding calculated?
- Funding Rate = Interest Rate Differencial + Premium Index
- Interest Rate Differencial
- Let’s suppose that BTC landing rate is 0.03% and USD landing rate is 0.06%, and we have 3 funding intervals per day.
- Interest Rate Differencial = (0.06% – 0.03%) / 3 = 0.01%
- Premium Index, Depending on the situation on the market, we determine impact bid price(IBP) and impact ask price(IAP). Impact price is calculated as Volume Weighted Average Price (VWAP) on the market for volume ~10 BTC
- Premium Index = (max(0, Impact Ask Price – Mark Price) – max(0, Mark Price – Impact Bid Price)) / Index Price
- The Funding Amount is equal to the position value times the Funding Rate.
- For example, the Mark Price is 4000 USD. You create a buy limit order (taker fee) at 3:00 UTC of 5000 contracts (contract size: 1 USD) that is ~1.25 BTC.
- You will pay a commission of 0.0003125 BTC [(5000*1)/4000*0.01%]
- The Funding Rate is 0.01%. At 4:00 UTC the Funding will be charged from your balance.
- Funding: -0.000125 BTC [(5000*1)/4000*0.01%]
- After the price of BTC changes to 5000 USD and you decide to close part of your position, you would create a market order selling 4000 contracts.
- You will also pay a commission of 0.0006 BTC [(4000*1)/5000*0.075%]
- The Funding Rate is changed to -0.02%. At 8:00 UTC the Funding will be added to your balance for the remaining position of 1000 contracts .
- Funding: +(1000*1)/5000*0.02%=+0.00004 BTC
How is my PNL calculated?
- Assume that you bought 500 contracts (contract size: 1 USD) at 3800 USD and then sold by market order 400 contracts at 4000 USD.
- As your position was not completely closed part of your unrealized PNL was transformed to realized PLN and the remaining of the position will be maintained as unrealized PNL:
- You also made a taker order, therefore, you have to pay takers fee = 400/4000 * 0.075% = 0.000075 BTC
- Realized PNL = 400 * 1 * (1/3800 – 1/4000) = 0,005263157 BTC minus fee
- Unrealized PNL = (500 – 400) * 1 * (1/3800 – 1/4000) = 0.0001315789 BTC
What are the applicable fees?
- Cryptology has constant trading fees for perpetual futures.
- Taker fees: 0.075%
- Maker fees: 0.005%
- FYI: Maintenance Margin includes commission for closing an open position and also include next funding to reduce the risk of wasting liquidation fund.
What is Cross-Margin?
- When you open a position on Cross-Margin, the system will work to maintain your margin above liquidation level by taking funds from your available balance. If there are not enough funds on your account, the system checks if it is possible to cancel active orders that hold margin and cancel these. If both conditions take place, all the open positions are closed at Market Price.
- Using Cross-Margin, Leverage is calculated as: Position size/Balance.
- NOTE: Currently, Futures on the Android version only supports Cross-Margin. Isolated Margin will be available soon.
What is Isolated-Margin?
- When you open a position on Isolated-Margin, the system will liquidate your position when it reaches liquidation level automatically. It will not take funds from your available balance, nor affect other open positions.
- Using Isolated-Margin, you can fix the leverage you would like to use. The Margin will be calculated as: Position Size x Leverage.
- NOTE: Currently, by default, the web version opens the position on Cross-Margin. If you wish to change this, you will need to drag the leverage forward towards x100, you will then see “Isolated” instead of “Cross”.
What is the Insurance Fund?
- Cryptology offers 100x leverage for Perpetual Futures Contract on Bitcoin, this is a highly volatile financial product. These two factors cause a high risk of default. To cover possible obligations of one trader to the others, we decided to create an Insurance Fund. The Insurance Fund is used according to the discretion and risk management policy of Cryptology. When opening a position, the trading system calculates two prices, the Liquidation Price and the Bankruptcy Price.
- Depending on the size of the position, liquidity and market volatility, the actual average Liquidation Price could be even worse than the Bankruptcy Price. In these cases, losses concerned with the market condition will be covered from the Liquidation Fund. If there are not enough funds to cover losses of liquidation then the system automatically goes to Auto-Deleveraging Liquidation. In the opposite case, if the actual average Liquidation Price is better than the Bankruptcy Price, these funds will go to the Liquidation Fund.
What is Auto-DeLeveraging (ADL)?
- Auto deleveraging is a procedure on the market when it is necessary to cover losses of some traders but there are not enough funds in the Liquidation Fund. In this case, the most profitable positions on the market will be automatically closed to cover losses.
- Futures withdrawals are processed everyday only one time per day at 10:00 UTC.
- Processing time may take up to 2 hours.
- Submit your withdrawal request by 10:00 UTC to be included in the same days batch.