EQONEX Dated Futures are physically settled into the underlying cryptocurrency. This means that at expiry, any accounts with an open futures position will have the contract closed, and a corresponding transaction will be booked into the account to settle the contract and the obligation to buy or sell the underlying asset. The price used will be the settlement price for this contract.
The ability to trade a futures contract stops two minutes before its expiry. So the final trade time would be 07:58 UTC on the last Friday of the expiry month.
A user enters 1 BTC of a BTC/USDC contract at 50,000 USDC.
The position remains open until 07:58 UTC on June 24, 2022, and the mark price is 60,000 USDC. The user’s account will show an unrealized P&L of 10,000 USDC.
The user cannot trade or reduce their position for the last 2 minutes of the contract life. The contract settles at 8.00am UTC on June 24, 2022, and the settlement price is 59,500 USDC.
The user will see two transactions booked into their account:
The first is a derivatives transaction to close their long futures position, -1 BTC of BTC/USDC booked at 59,500 USDC. This transaction means the user sees their unrealized P&L move to a realized P&L of 9,500 USDC in the account. There is no fee for this transaction.
The second transaction is a spot purchase of +1 BTC of BTC/USDC booked at 59,500 USDC, as the account was long the Dated Future. 1 BTC will appear in the account, and 59,000 USDC debited. There is a 0.02% fee associated with the settlement, so the user also pays an 11.9 USDC fee.
The total net USDC payment due from their account is (59,500 - 9,500 + 11.9) = 50,011.9 USDC.
The total USDC payment could potentially take the USDC account balance negative. If this takes the account balance below the negative balance limit (Negative Balance Under Cross Collateral), a cross-collateral liquidation will be triggered, which could lead to some of the BTC delivered being sold immediately to cover part of the negative balance.
See Delivery Margin for Dated Futures Contracts for details on the additional Delivery Margin required near contract expiry.
For further assistance or more information, please contact our Customer Support team via firstname.lastname@example.org or click on the chat widget at the bottom right-hand side of the EQONEX page.