Education
Here you will find all the knowledge and tools for confident trading in the
Moonbot terminal:
from understanding terms and strategies — to trade analysis and risk control.
Derivatives and Borrowed Funds
— trading with borrowed funds provided by the exchange, allowing you to open positions larger than your own capital. The exchange grants leverage (a loan) secured by the trader's margin deposit. For example, with 10× leverage and a 100 USDT balance, you can open a position worth 1,000 USDT. This increases both potential profit and risk: if the price moves against your position, losses are also multiplied. Upon reaching a critical loss level, liquidation is triggered — the exchange forcibly closes the position. In this case, the trader loses the margin deposit but owes nothing further: liquidation is handled automatically and does not result in debt like a bank loan.
— the trader’s own funds used as collateral to open a leveraged position. This amount is locked on the account for the entire duration of the position.
— derivative financial instruments (derivatives) representing contracts to buy or sell an asset at a predetermined price in the future. Unlike spot trading, where you own the actual asset (e.g., holding Bitcoin in your wallet), with futures you trade on the difference in price between the opening and closing of a position.
How it works: when you open a futures position, you don’t buy the asset itself — you speculate on the direction of its price movement. If you go long and the price increases, you earn the difference. If you go short and the price drops, you also profit. You don’t need to own the asset to “sell” it — you're simply entering into a contract.
To illustrate, futures trading is similar to betting on a sports match. You’re betting on the outcome (price rising or falling), without participating in the event or owning the object of the bet. Likewise, in futures trading, you don’t buy or sell the asset itself — you earn from the price difference between opening and closing the position.
Example: Bitcoin is priced at 90,000 USDT. You open a short position for 1 BTC, expecting the price to go down. When the position is opened, the exchange locks a portion of your funds — this is the margin that secures the trade. These funds remain frozen for as long as the position is open. The price drops to 85,000 USDT — you close the position. The exchange unlocks the margin and credits a profit of 5,000 USDT to your account (minus fees), even though you never actually owned any real Bitcoin.
Futures trading is usually available with leverage (see next term), allowing you to open positions far larger than your deposit. This boosts both potential profits and potential losses.
— the ability to trade with amounts larger than your own capital using borrowed funds from the exchange. It is expressed as a ratio, such as 1:10 or 10×, meaning the exchange lends you 9 dollars for every 1 dollar of your own.
Example: You have 1,000 USDT. With 10× leverage, you can open a position worth 10,000 USDT. If the asset price rises by 5%, your profit is 500 USDT (5% of 10,000), which is a 50% gainon your own capital. But if the price falls by 5%, you lose 500 USDT — a 50% loss. A 10% drop would trigger liquidation, and you'd lose your entire 1,000 USDT deposit.
It’s important to understand: leverage magnifies both potential gains and losses. The higher the leverage, the closer you are to liquidation if the price moves against your position. Beginners are advised to use minimal leverage (1:2 or 1:3), or avoid it altogether until they gain experience in risk management.
Can you avoid liquidation with smaller price movements?
— Yes, the deeper the liquidation threshold, the larger the margin and the safer the margin type used. The more funds allocated to back a position, the further the liquidation price.
Most exchanges offer two main margin modes:
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Isolated margin — a fixed amount of funds is assigned to each position. The risk is limited to that amount, but liquidation occurs sooner.
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Cross margin — the entire available account balance is used as collateral. This extends the distance to liquidation but puts your full balance at risk.
You can also manually add margin to an open position, pushing the liquidation price further away. However, this does not reduce risk — it simply increases the amount of capital at stake.
— forced closure of a position by the exchange when the loss reaches a critical level and the margin is no longer sufficient to cover potential losses.