Spot vs. Futures Trading
Conceptual Differences
Spot Trading: In spot trading, you buy and sell cryptocurrencies for immediate delivery. Once an order is executed, you directly own the digital asset.
Example: Buying BTC with USDT in the spot market means BTC is now in your wallet.
Futures Trading: In futures markets, you trade contracts that represent the value of a cryptocurrency without actually owning the underlying asset. Opening a position gives you exposure to price movements, but not the actual coin.
Example: Opening a long BTC position using USDT in the futures market does not grant ownership of BTC. Instead, your futures account holds the USDT, and the position reflects potential gains or losses depending on market movement.
Leverage
Leverage allows traders to control a large position with a small amount of capital. For example, with 100x leverage, you can open a 1 BTC position with only 300 USDT if BTC is priced at 30,000 USDT. In contrast, spot trading requires full payment upfront.
Go Long or Short
Spot Trading: You can only profit from upward price movements by buying and holding.
Futures Trading: You can open long or short positions, profiting from both rising and falling markets.
Perpetual vs. Traditional Futures Contracts
Traditional Futures: Agreements to buy/sell assets at a predetermined price on a specific date. Settlement occurs in the future.
Perpetual Futures: These contracts have no expiration date. Traders can hold positions indefinitely unless liquidated or manually closed.
Use Cases of Futures Trading
- Hedging: Lock in prices to protect spot investments from volatility.
- Speculation: Trade without owning the asset to profit from price movements.
- Leverage: Open larger positions than your account balance.
How to Open a Futures Account
Before opening a futures account, you must first register a regular CoinW account.
If you haven’t registered yet, go to the official CoinW website or open the CoinW app, and tap the “Register” button on the homepage or in the user center.
Registration Steps:
- Enter your email address or mobile phone number and set a secure password.
- If you have an invitation code, paste it into the "Invitation Code" field.
- Click “Send Verification Code” — you’ll receive a verification email or SMS shortly.
- Enter the code into the verification field.
- Check the box for “I have read and agree to the CoinW User Agreement.” and Click “Register.”
Once registered, log in to your CoinW account.
- Web: Hover over the top navigation and click “Futures.”
- App: Tap “Futures” in the bottom navigation bar.
On the Web version, you’ll be prompted to choose whether to take the beginner tutorial. If you select the tutorial, the system will guide you through basic futures operations. If you select “I’m already familiar,” you will be taken directly to the account activation page.
Note: This tutorial prompt currently appears only on the Web. It is not available on the App.
To activate your futures account:
- Check the box acknowledging the Risk Disclaimer.
- Click “Confirm to Activate.”
Once completed, your CoinW Futures account will be active and ready for trading.
How to Transfer Funds to Your Futures Account
After your futures account is activated, you can transfer funds between your general wallet and your futures wallet at any time.
Web Platform
There are two ways to transfer funds into your Futures Wallet:
- Go to Assets > Futures Wallet > Transfer and click the "Transfer" button.
- Alternatively, enter the Futures Trading Page and click the ⇄ icon next to "Available Margin."
App Platform
There are also two ways to transfer funds:
- Go to Assets > Futures Wallet > Transfer.
- Or enter the Futures page, and tap the ⇄ icon beside "Available Margin."
Then:
- Select transfer direction: from Spot Wallet to Futures Wallet.
- Enter the transfer amount.
- Click “Confirm Transfer.”
Funds will be reflected in your futures account immediately. You can also use the same ⇄ icon to switch transfer direction as needed.
CoinW Futures Interface Overview
1. Market Info Panel
- Choose trading pairs (e.g., BTC/USDT).
- View real-time funding rates and countdown to next settlement.
2. Chart & Depth Area
- View K-line charts, set time frames, add indicators.
- View current order book.
3. Order Entry Panel
- Place Market, Limit, or Trigger Orders.
- Pre-set Take-Profit/Stop-Loss.
- Transfer funds.
- Access trading calculator.
- Check bonus credits.
- Adjust leverage and position mode.
4. Position & Order Management This section allows users to view and manage all trading activities in real time.
- Position Overview: Displays all current positions, including contract pair, direction, size, entry price, margin used, estimated liquidation price, unrealized PnL, and ROI.
- Position Management Tools: Set TP/SL, execute partial or full closure via limit or market order, or one-click close all positions.
- Current Orders: View all pending limit orders.
- Trigger Orders: Monitor all conditional orders not yet triggered.
- Position History: Access records of all previously closed positions, filterable by position mode or order type.
- Transaction Logs: Review detailed account activity including transfers, fees, funding payments, and realized PnL. (Note: on the App, transaction logs are only partially available; refer to Position History for key details.)
- 5. Margin & Contract Information Panel
- Margin Usage Summary: See the total margin used, available margin, and net account PnL.
- Contract Specifications: Review data for the current contract, including tick size, max leverage, funding rate, and more.
How to Adjust Leverage
- Click the leverage multiplier in the order panel.
- Use slider or input exact value.
- Confirm to apply. Higher leverage = higher liquidation risk.
Order Types
CoinW Futures supports multiple order types to help you manage entries and exits under varying market conditions:
1. Market Order
A Market Order executes immediately at the best available price in the order book. It ensures quick entry or exit but does not guarantee the execution price. You will be charged a taker fee when using a market order.
2. Limit Order
A Limit Order lets you set a specific price to buy or sell a contract. Your order is placed in the order book and will only execute when the market price reaches your target. This allows you to buy at a lower price or sell at a higher one, but execution is not guaranteed.
Note: Limit orders that deviate significantly from market prices (i.e., placing a buy order above market or a sell order below market) may be filled instantly at market price and incur taker fees.
3. Trigger Order
Trigger Orders (also called conditional orders) activate only when the market reaches a specified trigger price. Once triggered, they can be executed either as a Market or Limit Order. Ideal for setting entries or exits in advance.
4. TP/SL Pre-set
Take-Profit (TP) and Stop-Loss (SL) levels can be defined when placing an order. These help automate position closure at your target profit or acceptable loss level.
Using the Futures Calculator
The CoinW Futures Calculator helps users simulate and estimate key trading metrics before opening a long or short position. It currently supports calculations for potential profit & loss, target close price, and estimated liquidation price.
Web Version:
Click the Calculator icon located in the order entry panel, as highlighted in the red box in the trading interface.
App Version:
Enter the Futures page, tap the "..." (More) icon in the upper-right corner, then tap Calculator to begin. The interface and process are illustrated in the image below (if available).
Features:
- Calculate projected PnL (Profit and Loss)
- Estimate the price at which liquidation may occur
- Simulate the close-out price to reach a profit target
Note: Due to real-time changes in your position setup, market volatility, and order book depth, the calculator’s outputs may differ from actual trading results. The data is provided as a reference only.
We recommend using this tool before opening positions to improve your trading strategy and risk awareness.
Funding Rate Overview
Funding rates are periodic payments exchanged between long and short traders to ensure that the price of perpetual futures stays close to the spot market price. These rates help align the futures market with the underlying asset.
- Positive Funding Rate: Long positions pay funding to short positions.
- Negative Funding Rate: Short positions pay funding to long positions.
Funding is settled every 8 hours on the CoinW platform.
Where to View Funding Rates:
- Web: Displayed at the top of the chart in the Futures trading interface.
- App: Located at the bottom of the order book.
You can also see a countdown to the next funding payment and preview the upcoming rate.
Margin Modes: Cross vs. Isolated
CoinW supports two types of margin modes to control risk:
1. Cross Margin
- All available funds in your futures account are shared across all open positions.
- If one position moves against you, your entire balance can be used to avoid liquidation.
2. Isolated Margin
- You allocate a fixed amount of margin to each position.
- Losses are limited to that allocation, and the rest of your account remains unaffected.
Important:
- You must close all open positions and cancel any pending orders before switching margin modes.
WEB
APP
Position Modes: Merged vs. Split
CoinW allows traders to manage positions using either of two modes:
Merged Mode:
- Positions with the same trading pair and direction are combined into one.
- Entry price, margin, and liquidation price are averaged accordingly.
Split Mode:
- Each order opens a separate position, even if it's for the same trading pair and direction.
- Each has its own independent entry price, margin, and PnL.
To Switch Modes:
- Ensure there are no active positions or open orders before changing the setting.
Liquidation: When It Happens and How to Prevent It
A position will be liquidated when the margin in your futures account—or the margin allocated to a specific position—is no longer sufficient to support that position.
Your margin balance includes both deposited funds and any unrealized profits and losses. This means ongoing PnL fluctuations directly affect your available margin and liquidation risk.
- In Cross Margin Mode, unrealized profits are added to your total account balance and used to support all open positions. If any position enters a deep loss, your entire futures balance could be impacted.
- In Isolated Margin Mode, you assign a fixed
How to Monitor and Prevent Liquidation:
- Go to your Position Panel to check your Risk Ratio and Estimated Liquidation Price in real time.
- Before hitting liquidation thresholds, add more margin to reduce your risk.
We strongly recommend keeping a buffer above the maintenance margin to avoid forced closures.
Final Notes
Futures contracts are powerful tools for trading and risk management—but they come with higher risks, especially when leverage is used.
We recommend new users:
- Start with small trades to get familiar with the platform.
- Learn how each mode (Cross, Isolated, Merged, Split) affects your capital.
- Regularly monitor margin usage, liquidation levels, and funding rates.