Unlock the Potential of Derivatives Trading with ZebPay Futures. Our highly anticipated feature allows you to trade Crypto assets without the need to directly own any cryptocurrency coins.
Get ready for a thrilling ride! We've made it incredibly easy for you. Just create an Account with ZebPay, breeze through your KYC, and top up your account with Indian Rupees. Let's dive into this adventure together and uncover the endless possibilities that await!
ZebPay Futures
Introducing ZebPay Futures, exclusively available for our KYC Verified Indian users on our Android and Web for now. With ZebPay Futures, experience the thrill of leverage trading without the need to invest directly in any Crypto Coins.
We're hard at work developing this feature for the app, and we're excited to announce that Futures will be coming soon to the iOS as well.
ZebPay Futures exclusively offers Perpetual Contracts for cryptocurrencies paired with INR; these contracts have no expiration date, unlike other types of Futures contracts.
Main Features
Use up to 25x leverage on Perpetual futures trading
Instant order execution with 0 time delay
Use 100+ indicators to improve your trading accuracy
Place Market and Limit orders and make your trades work wonders for you
Trade stress-free using our ultra-secure multi-stage security protocols
A seamless single-window trading terminal to keep you hyper-focused on your trading activity
TPSL function ( Take Profit and Stop Loss)
Margin Ratio Indicator
Open Position, Open Orders, Order history
Close Open Position and Cancel Open orders on single click
Separate Wallets for Spot & Futures trading
Before we jump into the step by step guide, let's understand some of the important terminologies in Crypto Futures.
Futures Trading Terminology
Leverage
Leverage enables traders to control a larger position in the market with a smaller amount of capital. It allows traders to amplify their potential returns. While leverage can magnify profits, it also increases the potential for losses, as losses are also amplified. It's crucial for traders to understand the risks associated with leverage and use it judiciously.
For each contract, the maximum leverage varies. To illustrate, upon launch, we are introducing BTC-INR and ETH-INR pairs with a maximum leverage of 20 times. This may change in the future.
For instance, investing Rs 1,000 with a 20X leverage gives you a trade size of Rs 20,000.
Funding Rate
The funding rate in futures trading, especially in perpetual contracts, is a periodic fee exchanged between buyers and sellers. It's calculated based on the difference between the spot price and the futures contract price, helping to balance and align them.
Depending on the token pair, the funding payments frequency can vary between 4 hours or 8 hours.
Funding Amounts are calculated using the following formula:
Funding Amount = Nominal Value of Position (of that contract) * Funding Rate (of that contract)
where, Nominal Value of Positions = Mark Price * Size of a Contract
Traders are only liable for funding payments in either direction if they have open positions at the pre-specified funding times.You are not liable for any funding if you do not have a position. If you close your position before the funding time, you will not pay or receive any funding.
Mark Price
The mark price serves as a benchmark for calculating unrealized profits and losses in futures trading. It is used to determine the current value of a position relative to the market, providing traders with a reference point to gauge their potential gains or losses without considering the price at which the position was opened. This helps traders monitor their positions more accurately and make informed decisions based on the current market conditions.
Liquidation
Liquidation occurs when a trader’s leveraged position is forcefully closed by the exchange due to either a partial or complete loss of the initial margin. This happens when a trader is unable to meet the margin requirements for their leveraged position, indicating a lack of sufficient funds to maintain the trade.
Liquidation Clearance Fees
A Liquidation Clearance fee is charged when a trader is unable to meet the margin requirements, indicating a lack of funds to keep the trade going. In this situation, the exchange has to forcefully close a trader’s position and a Liquidation Clearance fee will be applied, which includes the Taker fee as well.
TP/SL: Take Profit and Stop Loss
Take Profit (TP) and Stop Loss (SL) are risk management tools used by traders to automate their trading strategies and mitigate potential losses. Take Profit allows traders to set a predetermined price level at which they want to close a position to secure profits. Stop Loss, on the other hand, is set at a price level to limit losses by automatically closing a position when the market moves against the trader beyond a specified threshold. Properly setting TPSL levels is essential for managing risk and protecting trading capital.
Margin Ratio
Margin ratio, also known as margin requirement or margin maintenance level, is the minimum amount of capital that traders must maintain in their trading accounts to cover potential losses and fulfil margin obligations. It is expressed as a percentage of the total value of the position. If the margin ratio falls below the required level, traders may receive a margin call from their broker to deposit additional funds or close out positions to restore the required margin.
Now that you have a good understanding of basic concepts, let's dive in to know how we can use ZebPay Futures.
The first step for using the ZebPay Futures is to Register and complete your KYC. If you are already a KYC verified Indian user, just login to the android app or ZebPay Web.
Refer to our detailed article on Futures: Android & Web.
Fees and Limits for Futures
Like all other types of trading transactions, there are fees and limits attached to futures trading as well. For understanding the different types of fees and the GST for it, please refer to our Fees and Limits page on the website.
Risk Disclosure
Futures trading offers a wide range of opportunities for investors to participate in the financial markets and manage risk. Understanding the key concepts outlined in this article is essential for traders to make informed decisions and navigate the complexities of futures trading effectively. As with any form of trading, it's important to conduct thorough research, develop a solid trading plan, and adhere to risk management principles to maximise the chances of success.
Trading perpetual futures contracts involves significant risks, including but not limited to market volatility, leverage amplification of gains and losses, potential liquidation of positions, and the possibility of losing more than the initial investment. Investors should carefully consider their risk tolerance and financial situation before engaging in perpetual futures trading.
Frequently asked questions
Q1: How much is the TDS applicable for Futures Trading?
Ans: Under the current TDS structure for Virtual Digital Assets (VDAs) in India, TDS is applicable solely upon the transfer of VDAs. Since futures trading involves trading contracts rather than actual VDAs, no TDS is applicable in futures trading.
Q2: Is 30% Profit and Loss tax rule for VDAs applicable to Futures Trading?
Ans: In contrast to Virtual Digital Asset (VDA) trades, profits from futures trading aren't subject to a flat 30% tax rate. Crypto futures fall outside the definition of VDAs, which encompasses assets like Bitcoin, Ether, non-fungible tokens (NFTs), and 'notified assets,' the latter of which remains unspecified by the government. As crypto derivatives aren't considered crypto assets at present, they are taxed as futures products, exempt from crypto taxation. Consequently, gains in crypto futures are taxed according to your regular tax bracket, with the flexibility to offset losses for up to four subsequent years.
Q3: Can I deposit crypto and trade the same in Futures?
Ans: ZebPay Futures provides a range of selected perpetual contracts for futures trading, where cryptocurrencies are paired with INR. Since these are contract-based trades, you cannot directly deposit cryptocurrency into Futures for trading. However, you can deposit cryptocurrency into your ZebPay account, sell it, and use the received INR to trade in Futures.
Q4: Can I add more funds and save my positions from liquidation in case of high margin ratio?
Ans: Yes, adding more funds can help prevent liquidation in cases of high margin ratios. By increasing your margin, you provide additional collateral to support your positions, reducing the risk of liquidation.
Q5: How do I know if my position is liquidated?
Ans: Typically, you'll receive notifications or see alerts indicating that your position has been liquidated. Additionally, you can monitor your open positions and margin levels to assess whether they are approaching liquidation thresholds. If your position is liquidated, you may see a zero balance or a closed position in your account.
Q6: Why am I not able to place TP/SL on the same price levels?
Ans: Take Profit must be strictly greater than 1.001 times the Mark Price.
Stop Loss Price must be strictly greater than the Liquidation Price and strictly lower than 0.999 times the Mark Price.That's the reason why the platform may not allow you to place orders at certain price levels.
Q7: What is the GST applicable on Futures Trading?
Ans: GST is levied at a rate of 18% on all deducted fees.
Q8: How do you calculate the Estimated Profit and Loss?
Ans: The formula for calculating is mentioned below.
Estimated Profit: Absolute of {(TP price - Entry Price) * Entered Quantity}
Estimated Loss: Absolute of {(Entry Price - SL price) * Entered Quantity}
Estimated Profit % = Estimated Profit / ((entered quantity * Margin of the position)/position quantity))
Estimated Loss % = Estimated Loss / (entered quantity * Margin of the position)/position quantity))
By setting TP and SL orders, you can better manage your risk and secure your profits. If you have any questions or need further assistance, please don't hesitate to contact our support team.
Q8: How do I know if my margin is near or falling below liquidation price?
Ans: Monitor your trades in perpetual futures contract(s) and Futures account, ensuring adequate margin during volatile times to prevent liquidation. Please note, failure to maintain sufficient margin may result in liquidation and a Liquidation Fee, for which ZebPay holds no liability. Stay tuned as we work on introducing a margin call or alert system in the near future.