I. What is a Non-Liquidation Futures?

• When users trade Crypto Futures and encounter short-term market volatility, their positions may be liquidated (liquidation) if the margin is insufficient. Users will lose all their margins. Even if the price recovers to its previous level in a short period, the losses incurred through liquidation are irreversible.
• To address this issue, Coincall has introduced a contract product called "Non-Liquidation Futures" (Symbol: Crypto-NL-Expiration Date-Leverage) for users to trade without the risk of liquidation.
• The Coincall Non-Liquidation Futures is a cryptocurrency contract settled in USDT. The underlying asset of the Non-Liquidation Futures is the corresponding crypto's options. Investors can profit from the rise or fall in the price of cryptocurrencies by buying long or selling short Non-Liquidation Futures.
• Please note: Currently, only buying long is supported; we are still in the process of developing Non-Liquidation Futures for selling short.

II. Elements of Non-Liquidation Contracts

Symbol Explanation：

Example: BTC-NL-0329-20x. This contract signifies BTC- Non-Liquidation -March 29th Expiration-Leverage approximately 20x, corresponding to the option BTC-29MAR24-55000-C.

III. Margin Calculation

For margin calculation with options: See details

Example:

Assuming the current BTC price is $44,000 on December 21, 2023, and the user is bullish on BTC. The BTC-NL-0329-20x mark price is $57,376.

Placing an order with a marked price of $57,376 to buy 1 BTC.

Initial margin = Option premium of BTC-NL-0329-20x = $2,376.

Actual leverage = 57376 / 2376 = 24x.

As the underlying is an option, the maintenance margin rate (MM%) is always 0, meaning there is no risk of liquidation.

* While only buying Non-Liquidation Futures avoids liquidation, trading other standard contracts may lead to account liquidation since the account operates in full liquidation mode.

IV. Profit and Loss Calculation

Non-Expiration Profit and Loss

Example using the same date as before, December 21, 2023, and for illustrative purposes only, not for investment advice.

Continuing with the example, with a margin of $2,376, buying 1 BTC Non-Liquidation Futures (BTC-NL-0329-20x) when BTC is priced at $44,000.

• When BTC rises to $47,000 (a 6.8% increase), the Non-Liquidation Futures price is $58,356. Since the theoretical price of the corresponding option is $3,356, the profit is $1,177, with a return of 49.5%. The actual leverage changes due to price and time variations.
• If BTC falls to $41,000 (a 6.8% decrease), the Non-Liquidation Futures price is $56,511. Since the theoretical option price is $1,511, there is a loss of -$865, with a return of -36.4%.

Regardless of how much BTC falls, there is no risk of liquidation, and the position remains intact after a subsequent rise.

Expiration Profit and Loss

At expiration, the higher the difference between the Non-Liquidation Futures price and the spot price, the greater the profit. If the difference is small or negative, there will be a loss.

For example, for BTC-NL-0329-20x, the expiration date is March 29. On March 29, settlement occurs, and the user will profit only if the BTC price is above $55,000, as the exercise price of the corresponding option is $55,000.