About Quarterly Futures Contract

Definition of Quarterly Futures Contract

A Quarterly futures contract (QFC) refers to an agreement to purchase or sell the underlying asset at a fixed price at a particular time (delivery date) in the future. Other than perpetual futures contracts, quarterly futures contracts can expire. When the QFC is due, both the contract buyer and seller are obligated to execute the contract. This is regardless of where the price of the underlying asset is actually at. The buyer gains if the settlement price is higher than the entry price while the seller gains if the settlement is lower than the entry price.

What is BTCUSD Quarterly 0925 Futures Contract?

The first QFC launched by PayBitoPro Futures is BTCUSD Quarterly 0925 futures contract. The ticker name indicates the underlying asset and expiry date.

BTCUSD Quarterly 0925 futures contract is quoted and settled in the denominated BTC tokens.

BTCUSD Quarterly 0925 futures contract uses BTC tokens as collateral, which means you need to have BTC tokens to trade on a QFC.

The contract of BTCUSD Quarterly 0925 futures will expire on the last Friday of the corresponding three-month period, which is on 25 September 2020 at 08:00:00 UTC.

A flat 0.015% delivery fee will be charged for all positions settled on the delivery date. Should we add more quarterly futures contracts for trading, an official announcement will be made in advance.

BTCUSD Quarterly 0925 futures contract is a cash-delivered futures contract. Cash delivery is also known as cash settlement. When the contract is due, the underlying asset is not exchanged directly. Instead, all open positions will be delivered at a settlement price (index-based last-hour moving average price).

Detailed Stipulations of BTCUSD Quarterly 0925 Futures Contract

1. Size Unit:

PayBitoPro Futures uses “contract” as a standardized size unit when describing the QFC position size. For example, there are 10 contracts of BTCUSD Quarterly 0925 long position and 20 contracts of BTCUSD Quarterly 0925 short position.

2. Contract Multiplier:

The contract multiplier represents the value of a contract. Each contract of BTCUSD Quarterly 0925 represents 100 USD. For example, there are 1,000 USD of BTCUSD Quarterly 0925 long position (100 USD x 10 contracts) and 2,000 USD of BTCUSD Quarterly 0925 short position (100 USD x 20 contracts).

3. Notional Value:

Notional value is the contract value of a futures contract. BTC dominates the notional value of BTCUSD Quarterly 0925. The calculation of the contract’s notional value requires multiplying the contract unit by the contract multiplier. Then, divide it by the position’s average entry price. PayBitoPro Futures uses the notional value to calculate the required margin, trading fee, delivery fee, and PNL.

For example, the notional value of BTCUSD Quarterly 0925 long position is

(Contract Size x Contract Multiplier) / Entry Price

= (10 Contracts x 100 USD) / 10,104 USD

= 0.09897 BTC

4. Unrealized and Realized PNL:

Realized PNL refers to profits and losses coming from a successful trade transaction. On the other hand, unrealized PNL refers to profits and losses that are happening but the transaction is yet to be successful. For example, when User A opens 10 contracts of BTCUSD Quarterly 0925 long position, the unrealized PNL would be 0.0007 BTC. Once User A has shut the position, then only User A has earned 0.0007 BTC of the PNL.

Unrealized PNL (BTC)

Contract Size x Contract Multiplier x (1 / Entry Price – 1 / Mark Price)

=> 10 Contracts x 100 USD x (1 / 10,104 USD – 1 / 10,175.8 USD)

=) 0.0007 BTC

For more specifications, kindly refer to the Specifications of Quarterly Futures Contract.