Explanation of Cross Margin Mode for Perpetual Contracts

Dear SUNX Users,

To help you understand how account funds are calculated, how liquidation works, and which trading rules apply under Cross Margin mode for perpetual contracts, please review the following information.

1. Overview of Cross Margin Mode

In Cross Margin mode, all available funds in your futures account serve as shared margin to support positions and cover losses. Losses on a single position may exceed its initial margin and affect other positions in the account.

Please manage your position sizes and leverage carefully. We recommend setting a stop-loss when opening a position to help control trading risk.

2. Account Metrics and Formulas

1. Available Margin

The margin available for opening additional positions.

Available Margin = Account Balance − Used Margin + Unrealized PnL − Trading Fees − Overnight Fees

Unrealized PnL directly affects available margin. Available margin increases as unrealized profits rise and decreases as unrealized profits fall or unrealized losses grow.

2. Used Margin

The total margin occupied by all open positions.

3. Unrealized PnL

The unsettled profit or loss on current positions.

4. Account Balance

The settled account balance, reflecting fund movements, realized PnL, and settled trading costs.

5. Equity

The account’s equity after accounting for current unrealized PnL and applicable fees.

Equity = Account Balance + Unrealized PnL − Trading Fees − Overnight Fees

6. Risk Ratio

An indicator used to measure the risk of positions in the account.

Risk Ratio = Equity ÷ Used Margin × 100%

A higher risk ratio indicates relatively lower account risk, while a lower risk ratio indicates relatively higher account risk. Please refer to the liquidation rules below for the trigger condition.

3. Liquidation Rules

In Cross Margin mode, market price fluctuations may cause unrealized losses to exceed a position’s initial margin.

When the account’s risk ratio falls below 10%, the system will trigger liquidation and close all open positions in the account.

Liquidation will be executed at the latest market price at the time of the trigger. Any surplus remaining after liquidation settlement will be transferred to the Insurance Fund to cover negative account balances.

In Cross Margin mode, losses may exceed the initial margin of an individual position. The maximum loss may reach 100% of the funds in the futures account. Please monitor your risk ratio closely and take timely action, such as adding margin, reducing positions, or closing positions.

4. Insurance Fund

The Insurance Fund is established by the platform to provide financial support for the normal operation of futures trading and to cover negative account balances and losses arising from unforeseen risks.

5. Switching Between Cross Margin and Isolated Margin Modes

Before switching margin modes, please check your positions and pending orders:

• No open positions or pending orders: You may switch between Cross Margin and Isolated Margin modes according to your trading needs.
• Open Cross Margin positions: You cannot switch to Isolated Margin mode until all Cross Margin positions have been closed.
• Open Isolated Margin positions: You cannot switch to Cross Margin mode until all Isolated Margin positions have been closed.
• Pending orders: You cannot switch margin modes until the relevant orders have been canceled.

6. Trigger Orders in Cross Margin Mode

1. No margin is reserved when a trigger order is placed

In Cross Margin mode, placing a trigger order does not reserve funds from your account balance in advance. Once the order is triggered, the system allocates the margin required to open the position, reducing available margin accordingly.

Therefore, the current available margin does not limit the amount of trigger orders you can place, allowing you to plan trading strategies in advance.

2. Trigger orders are automatically canceled if margin is insufficient at the time of triggering

If available margin is insufficient when a trigger order is triggered, the system will not execute the order and will automatically cancel it. The cancellation reason will be displayed as “Order canceled due to insufficient margin.”

Other trigger orders that have not yet been triggered will remain unaffected.

Risk Warning

Perpetual contract trading involves significant risk, and leverage can amplify both profits and losses. Please ensure that you understand Cross Margin mode and the liquidation rules, trade according to your risk tolerance, and monitor your account funds and positions closely.

Thank you for your support of SUNX!

SUNX Global Operations Team