Price Deviation Mechanism

To keep perpetual futures prices more closely aligned with spot market prices and to reduce the risk of abnormal-priced orders during extreme market conditions, Hotcoin has introduced a Price Deviation mechanism.

When a user's order price deviates significantly from the reasonable market price range, the system may freeze additional deviation margin to mitigate risk.

The Price Deviation mechanism is mainly designed to:

• Reduce the risk of abnormal-priced orders
• Prevent risk amplification during extreme market conditions
• Improve market stability
• Reduce liquidation and potential loss risk

Why Is Deviation Margin Charged for Unfilled Orders?

Even if an order has not been filled, orders placed significantly away from the current market price may still be executed rapidly during periods of extreme volatility, sharp price wicks, or insufficient liquidity.

For example:

• The current BTC market price is 100,000 USDT

A user places:

• a long buy order at 120,000 USDT
• or a short sell order at 80,000 USDT

Once such abnormal-priced orders are executed, the execution price may deviate significantly from the normal market price, potentially causing the margin ratio to decline rapidly and increasing the risk of liquidation or additional losses.

Therefore, when an order price deviates significantly from the reasonable market price range, the system may pre-freeze additional margin to mitigate risk.

When Will Deviation Margin Be Released?

When an order is canceled, expired, or fully executed, the related frozen deviation margin is usually released automatically and returned to the available balance.

Please refer to the account and order pages for the actual release timing.

How Is Price Deviation Calculated?

Upper Deviation Price:

When the price of a long buy order exceeds the Upper Deviation Price, the system will charge additional deviation margin.

Lower Deviation Price:

Additional deviation margin may apply when the price of a short sell order falls below the Lower Deviation Price.

Note: Price deviation rules, margin requirements, and calculation methods may vary across different contract products. Please refer to the actual trading page for the latest rules.