A traditional futures contract has the following properties:
An underlying asset (gold, oil, Bitcoin)
An expiry, or settlement date (e.g. 20-10-2020)
Placing a buy order for a futures contract is analogous to going long on the contract.
Placing a sell order for a futures contract is analogous to going short on the contract.
Once your order is filled, you will have a position.
The position can be either a long position (if you placed a buy order), or a short position (if you placed a sell order).
Positions for traditional futures contract remain active until you either close the position, or until the expiry is reached (at which point they are automatically closed).
All of the futures contracts on Mushino are perpetual. Perpetual futures have no expiry or settlement. You can keep your position for as long as you want.
Profits and Losses
The profit or loss that you incur from your position is a function of the entry price of the position, the exit price of the position and the size of the position.
For a traditional, linear futures contract, the formula's are:
P&L(Long) = (exit price - entry price) * size
P&L(Short) = (entry price - exit price) * size
Notice that there are two formula's, one for long positions and one for short positions. The intuition behind the formula's is pretty simple:
When long, the price should rise for you to profit (the price at which you exit the position should be higher than the price at which you enter the position)
When short, for you to profit, the opposite should be true
For inverse futures contracts, the formula's are slightly different:
P&L(Long) = (1/entry price - 1/exit price) * size
P&L(Short) = (1/exit price - 1/entry price) * size
All of the futures contracts on Mushino are inverse.
The payout of inverse futures contracts is slightly different than the payout for linear contracts:
Inverse contracts have a property that make them perfect for hedging purposes.
When you're short with 1x leverage on an inverse contract that is quoted in USD, you effectively maintain the USD value of your position. No matter what happens to the price of the contract's underlying asset, your position is always worth the same amount of USD. Such a position can never be liquidated.