AEGET Perpetual Contract Essentials Guide – AEGET

1. What Is a Perpetual Contract?

A perpetual contract is a type of derivative product similar to leveraged spot trading. It is settled in cryptocurrencies such as BTC or USDT. Traders can go long (buy) or go short (sell) to profit from price increases or decreases.

Unlike traditional futures, perpetual contracts have no expiration date, allowing positions to be held indefinitely. To ensure the contract price aligns with the underlying asset price, a funding fee mechanism is used to balance the market.

2. How the Perpetual Contract Market Works

(1) Mark Price Mechanism

AEGET uses a fair price marking method to calculate unrealized PnL and liquidation prices.

This prevents unnecessary liquidations caused by short-term price volatility.

(2) Margin System

Initial Margin: The minimum margin required to open a position. It determines the maximum leverage available.
Maintenance Margin: The minimum margin required to maintain a position. Falling below this level triggers forced liquidation.

(3) Funding Fee Mechanism

Traders periodically exchange funding fees to keep the perpetual contract price in line with spot markets.
Settlement times: Every 8 hours (UTC+8: 08:00, 16:00, 00:00)
Funding fee rules:

Positive rate: Longs pay, shorts receive.

Negative rate: Shorts pay, longs receive.

Only traders holding a position at the funding timestamp are subject to paying or receiving the fee.

3. Long vs. Short

Long Position:

Expecting the price to rise, the trader buys low and sells high.
Example: Buy 1 coin at 10 USDT. If it rises to 15 USDT, selling yields 5 USDT profit.

Short Position:

Expecting the price to fall, the trader sells borrowed coins at a higher price, then buys them back lower.
Example: Borrow and sell 1 coin at 10 USDT. Buy it back at 5 USDT. Profit = 5 USDT (excluding fees).

Comparison:

Aspect	Long	Short
Market Outlook	Bullish (Price ↑)	Bearish (Price ↓)
Entry	Buy Low → Sell High	Borrow → Sell → Buy Back
Profit Source	Price Increase	Price Decrease
Risk	Loss if Price ↓	Loss if Price ↑ (Risk of Liquidation)

4. Position Opening Methods

(1) Based on Position Value:

Margin is calculated using the position size and leverage ratio.
Example: 20,000 USDT position with 200x leverage requires only 100 USDT margin.

(2) USDT-Margined Contracts:

Use stablecoins like USDT for both margin and settlement. Profits/losses are all calculated in USDT.
Best suited for traders seeking stable margin performance.

5. Order Types

Market Order: Executes immediately at the best available market price. Suitable for quick entries and exits.
Limit Order: Executes at a predefined or better price. Best for traders who prefer specific entry points.
Trigger Order: Executes only when a trigger condition is met.
Example: BTC price is 50,000 USDT. If trigger = 52,000 USDT, system auto-buys when it reaches 52,000.

6. Margin Modes

Cross Margin Mode: All positions share the same margin pool. One position's loss may consume margin from others, risking total liquidation.
Isolated Margin Mode: Each position uses its own dedicated margin. Losses are isolated and won't affect other positions in the account.

7. Risk Warnings

Liquidation Risk: If margin drops below the maintenance level, the position may be force-liquidated.
Leverage Risk: Higher leverage amplifies both gains and losses. Use with caution.
Funding Fee Risk: Holding positions long-term may incur additional costs due to funding mechanisms.