Pending final legal review. Items shown in square brackets, such as [JURISDICTION], will be completed by Xenobex before the public launch of the Service.
Futures Trading Risk Disclosure
Futures are complex leveraged products. A small price movement can cause a large loss, and you can lose your entire margin within minutes through liquidation. Futures are not suitable for most people. You must read and accept this disclosure before you can trade futures, and you should only trade them if you fully understand how they work and can afford to lose all of the margin you commit.
1. About This Disclosure
1.1 This disclosure is provided by Xenobex ("Xenobex", "we", "us") and applies to the USDT-margined perpetual futures contracts offered in the Service. It supplements the Terms of Use and the Virtual Asset Trading Risk Disclosure, which also apply to futures trading. Words defined in the Terms of Use have the same meaning here.
1.2 This disclosure explains the main features and risks of futures trading in the Service. It does not describe every risk. The parameters of each contract (such as the maximum leverage, maintenance margin rate, fees, funding interval and price limits) are shown in the contract details in the Service and may change as described in the Terms of Use.
2. How Perpetual Contracts Work
2.1 A perpetual contract lets you take a long position (which gains when the price rises) or a short position (which gains when the price falls) on an underlying virtual asset without owning it. The contract has no expiry date and all margin, profit, loss, fees and funding are settled in USDT.
2.2 Futures use a separate futures wallet. You must transfer USDT from your spot wallet to the futures wallet before trading, and only the amount that is not needed to support your positions and orders can be transferred back. Unrealised profit cannot be transferred or withdrawn until it is realised, and unrealised loss reduces what you can transfer.
2.3 Each market holds one net position per account: buying reduces or closes a short before opening a long, and selling does the reverse. The Service does not offer hedge mode, portfolio margin or tiered maintenance margin.
3. Leverage
3.1 Leverage lets you open a position whose value is many times the margin you commit. It multiplies losses in the same way as gains. For example, with 20x leverage a price move of about 5% against your position is enough to wipe out its margin, and with 100x leverage a move of about 1% is enough, even before fees and funding.
3.2 Each market has a maximum leverage and a maximum position size. Higher leverage brings your liquidation price closer to the entry price and leaves less room for normal price fluctuation.
3.3 Your losses are not limited to a part of your margin: you can lose all of the margin supporting a position, and with cross margin all of the balance in your futures wallet.
4. Margin Modes: Cross and Isolated
4.1 With cross margin, the available balance of your futures wallet supports all of your cross positions together. A loss on one position can use up the balance supporting the others, and if the account falls below its maintenance requirement all of your cross positions are liquidated together.
4.2 With isolated margin, each position is supported only by the margin assigned to it. You can add margin to, or within limits remove margin from, an isolated position. Liquidation of an isolated position uses up its margin but does not use the rest of your balance, except where you close the position yourself at a price worse than its bankruptcy price.
4.3 You can change the margin mode or leverage of a market only when the change is allowed by the state of your positions and orders in that market.
5. Mark Price and Index Price
5.1 Unrealised profit and loss, margin requirements, liquidations and the triggers of conditional orders are based on the mark price, not on the last traded price. The mark price can differ from the last traded price and from prices of the same asset on other venues.
5.2 The index price of a contract is derived from the spot market of the underlying asset on the Service itself, using the best bid, best ask and last trade of that spot market. The mark price is derived from the best bid, best ask and last trade of the futures market, kept within a band around the index price.
5.3 Because the index is based on the Service's own spot order book, low liquidity, a halt or unusual trading in that spot market directly affects the mark price and can trigger liquidations. When a reliable mark price cannot be calculated, some actions (such as opening positions, removing margin or transferring funds) may be refused until it is available again.
6. Maintenance Margin and Liquidation
6.1 Each position must be supported by at least the maintenance margin, calculated from the position's value at the mark price and the market's maintenance margin rate. The Service monitors positions continuously, about once per second.
6.2 When an isolated position's margin plus its unrealised profit and loss falls to or below its maintenance margin, or when the equity of your cross positions falls to or below their combined maintenance margin, the position (for cross margin, all of your cross positions) is liquidated automatically, without further notice to you.
6.3 In a liquidation, Xenobex cancels your open orders in the affected market (for cross margin, in all cross markets) and closes the whole position by an order at the bankruptcy price, which is the price at which the margin of the position is exhausted. A liquidation fee, capped at the remaining margin, is charged and paid into the insurance fund.
6.4 As a result, liquidation normally means losing all or nearly all of the margin of the position. The estimated liquidation price shown in the Service is an estimate only: it changes with the mark price, funding, fees and, for cross margin, your other positions.
6.5 You are responsible for monitoring your positions and keeping enough margin. Xenobex sends a notice after a liquidation but is not obliged to warn you before one, and notices can be delayed.
7. Insurance Fund and Loss Sharing
7.1 Xenobex maintains an insurance fund. If a liquidated position cannot be closed on the order book at or better than its bankruptcy price, the insurance fund takes over the remaining position at the bankruptcy price, and it covers any shortfall when a liquidated account's losses exceed its margin.
7.2 The Service does not currently use auto-deleveraging (the automatic reduction of other members' profitable positions to cover a shortfall). Xenobex may introduce auto-deleveraging or another loss-sharing mechanism in the future after giving notice as described in the Terms of Use.
7.3 The insurance fund is limited. If it cannot cover a shortfall, the affected futures market is suspended until the fund is replenished, and during the suspension you may be unable to open, increase or close positions in that market.
7.4 Funding payments are collected from paying positions and passed to receiving positions. If the amount collected, together with any contribution from the insurance fund, is not enough to pay every receiving position in full, the payments are reduced in proportion, so you may receive less funding than calculated.
8. Funding Fees
8.1 To keep the contract price close to the index price, long and short positions exchange funding payments at fixed times (for example every eight hours), aligned to UTC. The interval of each market is shown in the contract details.
8.2 The funding rate is calculated from the average difference between the contract price and the index price over the interval, plus an interest component, within a maximum rate. When the rate is positive, long positions pay short positions; when it is negative, short positions pay long positions. Only positions open at the funding time pay or receive funding.
8.3 Funding is calculated on the full value of your position, so with leverage it can be large compared to your margin and can be charged repeatedly while you hold the position. For cross positions it is paid from your available balance and then from the position's margin; for isolated positions it is paid from the position's margin. Funding payments can bring a position closer to liquidation.
8.4 If funding cannot be applied at a scheduled time because of a system interruption, Xenobex may apply only the most recent interval and not the missed ones.
9. Orders, Price Limits and Conditional Orders
9.1 A limit order whose price is too far from the mark price may be rejected, and a market order is only filled within a band around the mark price; the unfilled remainder expires. Orders below the minimum value or above the maximum position size are rejected.
9.2 Order instructions such as post-only, immediate-or-cancel, fill-or-kill and reduce-only change how and whether an order is filled. A reduce-only order is rejected or cancelled when there is no position, or no part of the position left, for it to reduce.
9.3 Stop, take-profit and stop-loss orders are triggered by the mark price. When triggered, they are submitted to the order book like other orders and are not guaranteed to be filled, or to be filled at the trigger price, particularly in fast markets. A take-profit or stop-loss attached to a position may be cancelled when the position is closed or changes.
10. Volatility, Liquidity and Price Gaps
10.1 Virtual asset prices can jump without trading in between ("gaps"). In fast or thin markets, orders and liquidations may be filled at prices far from those you expected, and liquidations can trigger further liquidations, accelerating price moves.
10.2 Liquidity in futures markets may be limited and may disappear during stress. You may be unable to close a position when you want to, or only at a significant loss.
11. Trading Restrictions and Emergency Measures
11.1 Xenobex may, at any time and without prior notice, restrict futures trading to reduce-only orders (so that positions can be reduced or closed but not opened or increased), suspend a futures market, or restrict transfers, to protect members or the Service. This may happen across the whole Service or in a single market, for example during abnormal market conditions, a system incident, an insurance fund shortfall, or a halt or delisting of the underlying spot market.
11.2 If a futures market is to be closed permanently, Xenobex will announce the schedule and how open positions will be settled [SETTLEMENT METHOD FOR A CLOSED FUTURES MARKET]. Positions may be closed at a settlement price that differs from the price at which you could otherwise have closed them.
12. Fees and Costs
12.1 Futures trading fees are charged on the full value of each trade, not on your margin, so with leverage they are large compared to the margin you commit. Liquidation fees and funding are charged in addition. The current rates are published on the fee page of the Service.
13. System and Operational Risks
13.1 Delays, outages, maintenance, connection failures or errors in the Service, your device or your network can prevent you from adding margin, cancelling orders or closing positions in time. Liquidations, funding and conditional orders continue to run while you are unable to act, unless Xenobex suspends the market.
13.2 Prices, positions and balances shown in the Service, including those sent over real-time connections, may be delayed. The records of the Service's ledger prevail over what is displayed.
14. Eligibility, Regulation and Taxes
14.1 Futures trading may be restricted or prohibited where you live. You must not trade futures if it is unlawful for you to do so, and Xenobex may refuse or restrict futures trading for any account or jurisdiction to comply with the law.
14.2 Profits, losses and funding payments from futures may be taxable. You are responsible for your own tax obligations.
15. Your Acknowledgement
15.1 By accepting this disclosure you confirm that you have read and understood it; that you understand leverage, margin, liquidation and funding; that you are trading futures at your own risk and can bear the loss of all margin you commit; and that Xenobex is not liable for losses arising from the risks described here except as set out in the Terms of Use or required by law.
16. Contact Us
Xenobex · Registered address: [REGISTERED ADDRESS] · Registration number: [REGISTRATION NUMBER]
Customer support: the support page in the Service, or [SUPPORT EMAIL].