TradFi futures are futures contracts based on traditional financial market instruments. They allow you to trade the price movements of assets such as metals, oil, stocks, ETFs, or other instruments available on the platform.
The exchange features perpetual (hence the abbreviation PERP in the futures name, e.g., XAU-PERP) TradFi contracts — a type of TradFi futures contract with no fixed expiration time. This means you can keep your position open for as long as you need.
How Do TradFi Futures Work?
When trading TradFi futures, you do not buy the underlying asset itself. You trade a contract whose price depends on the value of a traditional financial market instrument.
For example, if a contract is based on gold, oil, or a stock, the outcome of your position depends on the price movement of that instrument. However, you do not own the physical commodity, stock, ETF, or other underlying asset.
You can open a position in two directions:
- Long — if you expect the price to rise.
- Short — if you expect the price to fall.
If the market moves in the direction of your position, it may bring a profit. If the market moves against your position, it may result in a loss.
TradFi Futures and Cryptocurrency Futures
The main difference lies in the underlying market.
Crypto futures are based on the price of cryptocurrencies, such as BTC, ETH, or other digital assets.
TradFi futures are based on traditional financial market instruments, such as metals, commodities, stocks, ETFs, or other similar assets.
The trading logic can be similar. You can open Long or Short positions, use leverage, manage margin, track PNL, and use available order types to manage your position.
Examples of TradFi Futures Instruments
On WhiteBIT, TradFi futures can include contracts related to popular traditional financial market instruments.
For example, you can find contracts related to:
- gold, e.g., XAU-PERP
- silver, e.g., XAG-PERP
- oil, e.g., CL-PERP
- Brent oil, e.g., BZ-PERP
- popular stocks, e.g., NVDA-PERP, TSLA-PERP, MSFT-PERP, AMD-PERP, GOOGL-PERP, META-PERP, and others
- popular ETFs, e.g., QQQ-PERP
Please note: the list of available instruments may change. To check the current list, open the TradFi Futures section in the trading terminal.
*screenshot of the terminal*
Leverage in TradFi Futures
Leverage allows you to open a position larger than the amount of your own funds used as margin.
For example, with 10x leverage, the position size can be 10 times larger than the margin used to open it.
Leverage can increase potential profit, but it also increases potential loss. Therefore, it should be used with caution.
Margin and Liquidation
Margin is the amount of funds used to open and maintain a futures position.
If the market moves against your position, the margin level may decrease. If the margin is insufficient to maintain the position, it can be liquidated.
Liquidation means the automatic closure of a position if the required margin level is no longer maintained.
To reduce the risk of liquidation, you can use lower leverage, monitor the margin, track the position size, and use Stop-Loss orders.
What is the Funding Rate?
The funding is a key mechanism of perpetual futures that ensures the contract price remains closely aligned with the price of the underlying asset (index price).
It represents periodic payments between traders holding Long and Short positions to keep the market balanced:
- When the funding rate is positive, Long positions pay Short positions
- When it is negative, Short positions pay Long positions
To learn more about how the rate is calculated, please refer to the article via the link: https://help.whitebit.com/hc/en-gb/articles/35403646760989
PNL in TradFi Futures
What is PNL, and what does it consist of?
PNL (Profit and Loss) is an indicator that reflects the profit or loss from trading. It is calculated as the difference between the cost of opening a position and the funds received after its partial or full closure, including fees.
There are two types of PNL:
- Realized PNL (rPNL) — the profit or loss on a position. This is the final financial result of the trade.
- Unrealized PNL (uPNL) — the potential profit or loss on an open position, which changes in real time depending on the asset's price.
Important: the funding rate is not included in the rPNL.
Calculation formula: PNL = (Exit Price × Number of Units Sold) − (Entry Price × Number of Units Bought) − Fees
Thus, PNL helps you evaluate strategy performance, control risks, and make decisions regarding position management.
Please note: the PNL calculator on WhiteBIT does not take into account trading fees and the funding rate.
Please note: the actual date and time of the funding accrual or deduction, taking into account all changes, are available via API.
Price Band
A price band is a system limit that controls how much an order's price can deviate from the last market price.
It applies to all types of trading (Spot, Margin, Futures, TradFi Futures) and both buying and selling. Regular Market orders are not subject to the limit.
The typical range is ±10% of the last price (may vary for a specific trading pair). Orders outside the range are rejected with the message: “Price must be less than or equal to…”
This rule helps avoid pricing errors, maintains the cleanliness of the order book, and protects against manipulation.
Risks to Consider
Futures trading involves a high level of risk.
Since leverage can amplify both profit and loss, the market can quickly move against your position. This can lead to the partial or total loss of the margin used for the position.
The price of traditional financial instruments can change under the influence of economic news, central bank decisions, corporate reports, geopolitical events, market volatility, and other factors.
FAQ
Do I own the underlying asset when trading TradFi futures?
No. You trade a futures contract whose price depends on the underlying instrument. You do not become the owner of the stock, ETF, commodity, currency, or other asset.
Can I trade in a falling market?
Yes. If you expect the price to fall, you can open a Short position.
Where can I find TradFi futures on WhiteBIT?
You can find them in the trading terminal by opening the TradFi Futures tab.