# Perpetuals Contract Specifications | Mark, Funding & PnL ### Overview PowerTrade Perpetuals are advanced crypto derivatives that let traders take long or short positions on digital assets (e.g., BTC, ETH) without holding the underlying tokens.\ This section details the **contract specifications**, **mark price logic**, **funding mechanism**, and **PnL calculation** for PowerTrade’s perpetual futures. > 📘 For a detailed explanation of how PowerTrade calculates funding rates, mark prices, and impact notional depth, see the full [**Funding Rate Methodology**](https://support.power.trade/trading/perpetuals/powertrade-perpetual-funding-rate-methodology-migration-overview) page. *** ### Introduction to Perpetuals Perpetual futures are margin-based trading instruments that **track the price of an underlying asset** without an expiry date. #### Long Position Traders open a **long position** if they expect the asset price to rise.\ Profit = (Mark Price – Entry Price) × Position Size. #### Short Position Traders open a **short position** if they expect the asset price to fall.\ Profit = (Entry Price – Mark Price) × Position Size. *** ### Difference Between Perpetuals and Term Futures Unlike traditional term futures, **PowerTrade Perpetuals have no expiry date**.\ They automatically roll over and remain open indefinitely. Traders gain or lose depending on price movements and periodic **funding payments**, which keep contract prices close to the underlying spot market. *** ### BTC/USD Perpetual Futures Specifications | Parameter | Description | | ------------------------- | ---------------------------------------- | | **Underlying Index** | BTC-USD-INDEX as published by PowerTrade | | **Contract Size** | 1 Contract = 1 BTC | | **Minimum Tick Size** | 0.50 | | **Minimum Quantity Step** | 0.0001 | | **Initial Margin** | 20% | | **Maintenance Margin** | Portfolio Margined (SPAN methodology) | | **Funding Currency** | USD | | **Settlement Frequency** | Every 1 hour | | **PnL Currency** | USD | *** ### Mark Price Calculation PowerTrade uses a **Mark Price** to fairly determine unrealized PnL and trigger liquidations.\ It is derived from real-time market data and a short-term exponential moving average to smooth volatility. Reference Price = Last traded price or manually set price. Market Price = Reference Price\ if it falls between the best bid and best ask;\ otherwise:\ \- Use best bid if Reference < best bid\ \- Use best ask if Reference > best ask Mark Price = Index Price + EMA(Market Price - Index Price) The **Exponential Moving Average (EMA)** is calculated over 15 seconds to ensure price stability. *** ### Funding Rate & Swap Logic Funding payments keep perpetual prices aligned with the spot market.\ They are exchanged between long and short traders once per hour based on the calculated **Swap Rate**. #### Formula *Swap Rate = Premium Rate + Differential Interest Rate* **Premium Rate** *MIS = (Mark Price - Index Price) / Index Price*\ \&#xNAN;*Premium Rate = Max(0.05%, MIS) + Min(-0.05%, MIS)* **Differential Interest Rate** *Differential Interest Rate = Interest(USD) - Interest(BTC)* (Currently set to 0.) **Interpretation:** * If **Swap Rate > 0**, longs pay shorts. * If **Swap Rate < 0**, shorts pay longs. The swap is accrued continuously in unrealized PnL and settled hourly between counterparties. *** #### Funding Settlement Change (Q1 2026) As part of PowerTrade’s new funding model rollout: * **Funding will only apply to open positions at settlement time.** * Positions closed before the hourly funding timestamp will **not** pay or receive funding. This change aligns PowerTrade’s logic with Bybit’s settlement system and creates a fairer, more predictable experience for traders. 📘 Learn more in our **Funding Rate Methodology**. *** ### Frequency of Funding Calculation Funding is computed continuously but applied every hour.\ Because the Swap Rate is expressed as a **daily percentage**, each second’s rate is divided by 86,400 (seconds in a day) for precise accrual. *** ### Profit & Loss (PnL) Profit or Loss (P\&L) for an open position is determined using the **Mark Price** and **Entry Price**. #### Long Position *P\&L = Position Size × (Mark Price – Entry Price) + settled funding* #### Short Position *P\&L = Position Size × (Entry Price – Mark Price) + settled funding* PnL becomes realized once the position is closed. *** ### Liquidation Logic If the **Account Balance + P\&L ≤ Maintenance Margin**, the system initiates liquidation: 1. **Cancel all open orders.** 2. If balance remains below requirement, **positions are force-closed** at market to restore margin. #### Insurance & Auto-Deleveraging (ADL) * **Insurance Fund:** Covers losses if a trader’s account goes negative. * **Auto-Deleveraging:** If the insurance fund is insufficient, profitable counterparties’ positions are reduced proportionally based on leverage and PnL priority. **Priority formula:** *Priority = PnL% × Effective Leverage (if PnL% > 0)*\ \&#xNAN;*Priority = PnL% / Effective Leverage (if PnL% < 0)* *** ### ETH/USD Perpetual Futures Specifications | Parameter | Description | | ------------------------- | ---------------------------------------- | | **Underlying Index** | ETH-USD-INDEX as published by PowerTrade | | **Contract Size** | 1 Contract = 1 ETH | | **Minimum Tick Size** | 0.05 | | **Minimum Quantity Step** | 0.001 | | **Initial Margin** | 20% | | **Maintenance Margin** | Portfolio Margined (SPAN methodology) | | **Funding Currency** | USD | | **Settlement Frequency** | Every 1 hour | | **PnL Currency** | USD | Mark price, funding logic, and liquidation rules follow the same structure as BTC perpetuals. *** ### Transparency & Reproducibility All PowerTrade perpetual data — including mark prices, index prices, and historical funding rates — can be independently verified using published APIs and historical data. For a full explanation of PowerTrade’s hourly funding rate mechanism, impact margin notional tiers, and reproducibility guide, visit the\ 👉 **PowerTrade Funding Rate Methodology**. *** **PowerTrade — Transparent, fair, and data-driven crypto derivatives.** *** ## Still have questions? **Email Support:** **Telegram:**