Xena Contracts are leveraged instruments launched on Xena Exchange. Each is a contract between a buyer and a seller to exchange the difference in value of a particular instrument between when the contract is opened and when it is closed. The perpetual contracts launched on Xena Exchange mirror the price of the underlying asset, be it BTC or an index, such as BTC volatility. Xena Contracts are divided into the following categories:

  • Xena Listed Perpetuals (contracts that do not expire)

  • Xena Futures (contracts that expire)

Both contract types can be traded with x20 leverage and include mechanisms to protect against manipulation. 

To learn more about the advantages of trading Xena Perpetuals, read this article

Since Xena Contracts are leveraged instruments, you are fully exposed to the price movements of the underlying instrument without having to pay the full price of that instrument. Contracts therefore offer the potential to make a higher return from a smaller initial outlay than investing directly in the underlying security. However, leverage also usually involves more risks than a direct investment in the underlying. It is important to understand that this effect may work both for and against traders – the use of leverage can lead to large losses as well as large gains.

To understand the way the contracts work, let’s take a closer look at the XBTUSD (Bitcoin to USD) perpetual contract as an example.

Alice anticipates that the price of Bitcoin will go up and enters into a transaction, buying 100,000 contracts at the current market price of $4,000. So, the value of her position as of the opening is 100,000 / 4,000 = 25 BTC.

The initial margin rate for XBTUSD is 5%. To enter into the transaction, Alice only needs 25 BTC * 5% = 1.25 BTC on her account. These funds will be locked on her account and returned when she closes the position.

The price goes up, and Alice sells the 100,000 contracts at $4,200. The value of the position as of closing is 100,000 / 4,200 = 23.81 BTC. The difference of values (1.19 BTC) is the Alice's profit.

If Alice had not been successful in her prediction and the price had fallen to $3,950, the value of the position would have been 100,000 / 3,950 = 25.31 BTC. The difference of values (-0.31 BTC) would have been Alice's loss.

Xena Exchange offers contracts for the major cryptocurrencies and some indexes over cryptocurrencies market. The full list of contracts can be found on https://trading.xena.exchange/contracts.

Unlike many OTC venues (such as Forex brokers), Xena Exchange is not a party of any trade. All trades occur between clients of the exchange. There is no explicit or hidden intention for us to manipulate the execution prices in any way. The prices of perpetuals are defined by the supply and demand balance of the market and by certain predefined measures that are required to keep the price of a perpetual close to the price of its underlying. These measures are explicitly described in the contract specifications and rules of trading.


Transparency is a key ingredient in a well-informed market. Xena Exchange reports on all Xena Contracts transacted, as well as open positions, bids, offers, and volumes – all the market information you are used to seeing when trading on an exchange. This makes for a fundamentally better-informed market.

  • All prices are formed in a fully transparent manner in the Xena Exchange order book. Each trader’s order is combined in the Xena Contracts order book with those from other market participants, including market makers, and becomes an integral part of the price discovery process.

  • All trades are executed on a strict price/time priority. Price/time priority means the first person to enter the best price is traded against first. This results in everyone in the central market order book being treated fairly and consistently, no matter how big or small a trader they are.

  • Importantly, while prices are transparent, the individual trader remains anonymous, which minimizes market impact costs (especially those related to others identifying an individual’s trading patterns and trading ahead of them).

  • Anyone can place a better bid or offer, as is the case in all exchange-based markets. No one is forced to accept the price offered in the market. However, once an order is executed, you are committed to settling the trade. All prices in the market are firm in the volume indicated.

  • The Xena Contracts order book includes orders from market makers. Their activities help ensure the Xena Contracts market maintains competitive prices and deep liquidity. Market makers operate on common conditions and do not have any advantages (such as last look) over other traders.

The key advantages of Xena Contracts

Product Range

Xena Contracts include the following:

  • Bitcoin to USD — XBTUSD

  • Ethereum to USD — ETHUSD

We are constantly expanding the offering of our underlyings. The full list of existing perpetuals is always available at https://trading.xena.exchange/contracts.

Hourly Clearing

The current cryptocurrency markets are highly volatile and include a significant level of risk, especially when assets are traded on leverage. Since the price of a Xena Contract is defined by the supply–demand balance in the order book, it may fluctuate around the actual underlying price and involve attempts of different traders to earn on these fluctuations and not on the price change of the underlying asset.

Hourly settlement helps fight these issues. Each hour, the current floating profit or loss of each open position is calculated using the price of the underlying index (for instance, the XBTUSD Perpetual is settled based on the value of the .BTC3_TWAP index, which is a combination of the Bitcoin-to-USD prices from three major cryptocurrency exchanges (Bitstamp, CoinBase Pro, and Kraken), additionally averaged over time) and settled to the traders’ accounts. 

Traders can use the settled profits without any restrictions — withdraw them or use them as margin for opening new positions.


Margin requirements for all open positions are calculated on the account level, not the position level. This allows for margin netting (used for most existing Xena Contracts).

Margin netting means that if you have two positions for the same instrument with different directions (longs and shorts), the margin will be taken only for positions of one side (the one greater in volume). Margin netting helps to reduce margin requirements (and thus your initial capital) without increasing the risks.

Smart liquidation

If the equity of a trader’s account falls below the maintenance margin, Xena Exchange will automatically close their positions to avoid further losses. This process is called liquidation.

Along with other mechanisms used to avoid unnecessary liquidation (which usually happen due to sudden changes in the asset price, after which the price returns to its normal value), the liquidation process will wait for several consecutive prices to confirm that a position must be liquidated.

Trading Hours

All Xena Listed Perpetuals are traded 24x7x365. Due to the nature of the cryptocurrency market, there are no bank holidays or non-working hours.

Trading might be stopped during maintenance windows. In such cases, Xena Exchange will provide as much notice to the market as possible to avoid negative effects on clients.

Trading Xena Contracts

Contracts are traded in a dedicated order book not linked to the order book of the underlying instrument. The order book displays the limit orders from market participants:

The bottom part of the order book displays bids — orders from clients looking to make a purchase. The top part of the screen displays asks (offers) — orders from clients looking to sell. The volume shows how many lots can be bought or sold at a certain price.

Long and Short Positions

With a Xena Contract, it is possible to go both “long” (to buy) and “short” (to sell). If you take a long position, you are anticipating a rise in the value of the underlying instrument and will experience a loss if the value falls. If you take a short position, you are anticipating a fall in the value of the underlying instrument, and if the value actually rises, you will experience a loss. In contrast to real underlying assets, where a trader usually buys first and sells later, with a Xena Contract, it is possible to first go short (or sell) to exploit falling prices and buy back (or go long) later.

The table below sets out the profit and loss situations when trading Xena Contracts:

Profitable trades

Unprofitable trades

Buy low – Sell high

Buy high – Sell low

Sell high – Buy low

Sell low – Buy high

Entering a position

When you enter a position, the initial margin is locked on your account as collateral. It protects you from the risk resulting from a negative movement in the value of a position as a result of a change in market prices. The initial margin is typically set at a level designed to cover reasonably foreseeable losses on a position between two consecutive hourly settlements. The amount of the initial margin for each contract varies according to the price volatility of the underlying and is defined in the contract specifications published at https://trading.xena.exchange/contracts.

The initial margin is returned when the contract is closed out without loss.

In addition to the initial margin required to open contracts, any adverse price movements in the market must be covered by further payments known as variation margins. The variation margin is based on the hourly mark-to-market revaluation of a Xena Contract position. In other words, the unrealized profit or loss, calculated for each of your Xena Contract positions using the price of the underlying index, is settled to your account.

Keeping the position open

Maintenance margins are calculated whenever you open a Xena Contract position and indicate the minimum equity of your account required to carry the position. If the equity falls below the maintenance margin, your positions will be closed by Xena Exchange through the liquidation process. Maintenance margins protect traders from execution slippages during liquidation and significantly decrease the risks of one’s account balance becoming negative.

The maintenance margin rate is normally a half of the initial margin rate and is chosen taking instrument volatility and liquidity into account. Margin rates are defined in the contract specifications published at https://trading.xena.exchange/contracts.

Paying the margins

Margins are recalculated on an hourly basis to ensure an adequate level of margin cover is maintained. However, in exceptional circumstances, margins may be recalculated intra-hour. This means that you may have to pay more if the market moves against you. If the market moves in your favour, the margins may fall. The settlement requirements for trading Xena Contracts are strict. The amount of collateral on your account must be sufficient to pay the increased margins at each hourly settlement to avoid the liquidation of your positions.


If the equity of a trader’s account falls below the maintenance margin, Xena Exchange will automatically close their positions to avoid further losses. This process is called liquidation.

Along with other mechanisms used to avoid unnecessary liquidation (which usually happen due to sudden changes in the asset price, after which the price returns to its normal value), the liquidation process will wait for several consecutive prices to confirm that a position must be liquidated.

The rules of margin trading at Xena Exchange are also covered in the article Understanding the Rules of Margin Trading at Xena Exchange


When a trader’s position is liquidated, the position is taken over by the Xena Exchange liquidation engine. If there’s not enough liquidity on the market to close a position that should be liquidated, a position on the opposing side is chosen and closed at the liquidation price.

Access contract trading statistics

In the Contracts tab in the terminal, you can find the Contract portfolio and access data on your trading performance, including your real-time PnL. Go here for further information.

Tracking fees and costs

Each trade executed in the Xena Contracts order book is subject to trading fees. The trading fee rate depends on whether you are a maker (submitted a limit order that added liquidity to the order book) or a taker (submitted a market, stop, or limit order that removed liquidity from the order book). The current fee rates are published in a separate article.

Cash flows

Unlike other forms of derivatives (e.g., options and futures), cash flows such as carry costs are not reflected in the price of a Xena Contract. Instead, cash flows are paid while the position is open, allowing Xena Listed Perpetual prices to track the underlying security rather than trade at a discount or premium, as can be the case with other types of derivatives.

Xena Contracts have two distinctive cash flows that impact the holders of open positions:

  • Premium (perpetual contracts only)

  • Risk Adjustment

We have no fixed-percentage rates, and the rates that are not obvious are covered by the Premium mechanism.

Both cash flows are calculated and settled at each hourly clearing.


Premium is used to push the price of a Xena Contract to the price of its underlying. The premium is calculated and paid at each hourly settlement. Exact calculations may differ from one perpetual to another and are described in the contract specifications of each particular perpetual. The currently anticipated premium rates are published on https://trading.xena.exchange/contracts.

If the price of a perpetual at the moment of an hourly settlement is higher than the price of its underlying, the premium rate is positive, which means that holders of long positions will pay the holders of short positions. Knowing that, holders of long positions will tend to close their positions (i.e., sell the perpetuals on the market), thus pushing the price down. The same happens if the price of the perpetual is below the price of the underlying: The holders of short positions will have to pay the holders of long positions at the hourly clearing, so the holders of the short positions will try to close them (i.e., buy the contracts on the market), pushing the price up.

Risk adjustment

Risk adjustment is the hourly cost charged by Xena Exchange for holding an open position in a Xena Contract.

The risk adjustment rate is set by Xena Exchange and is paid hourly by both long and short position holders. The risk adjustment can be changed by Xena Exchange in response to market circumstances. The rate can move up and down but is expected to be adjusted only infrequently.

Traders can view the current risk adjustment rates and any upcoming changes on the Xena Exchange website at https://trading.xena.exchange/contracts.

No regular interest payments

Many forms of derivatives (such as FX CFDs) include regular interest payments (also known as swaps). Swaps reflect the difference between the cost of borrowing the quote currency and lending the base currency. If there were no swaps, no-risk earning on the swap rate would be possible, and due to that, the price of a derivative and its underlying would differ.

On the cryptocurrency market, there is no reliable source of lending rates that reflect the real state of the market and can be used as a reference (like the LIBOR rate on the traditional finance markets). Discoverable lending rates are highly volatile and prone to manipulation, making their usage in derivatives impossible.

At the moment, no Xena Contracts imply regular interest payments. Another approach (premium payments) is used to align the prices of perpetuals with the prices of their underlying assets.

Once the cryptocurrency money market evolves and trustable lending rate sources appear, Xena Exchange will review the specifications of Xena Contracts to include the market interest rates.

Risks of trading Xena Contracts

Xena Contracts are not suitable for all traders and investors. In light of the risks associated, you should only trade them if you are confident that you understand Xena Contracts and the risks. Before trading Xena Contracts, you should carefully assess your experience, investment objectives, financial resources, and all other relevant considerations and consult your adviser. Among the main risks of trading Xena Contracts are the following:

Implications of leverage

Leverage (or gearing) is using given resources in such a way that the potential positive or negative outcome is magnified. Xena Contracts are leveraged: They offer the potential to make a higher return from a smaller initial outlay than for a non-leveraged transaction, such as direct share investing. 

The following example illustrates the effect of leverage on a long Xena Contract position. The table compares the possible purchase of 100,000 lots (worth 100,000 USDT) on a long XBTUSDT perpetual and 25 BTC. The higher percentage return from Xena Contracts demonstrates how leverage can work.


XBTUSDT Contract

Opening contract value

Quantity purchased

25 BTC

100,000 lots (100,000 USDT)


4000 USDT per BTC

4000 USDT per contract

Position value

25 BTC / 100,000 USDT

25 BTC / 100,000 USDT

Capital outlay (with 1% initial margin for the Perpetual)

25 BTC

0.25 BTC

Closing contract value

Quantity held

25 BTC

100,000 lots (100,000 USDT)

Market/closing price

3960 USDT per BTC

3960 per contract

Position value

25 BTC / 99,000 USDT

25 BTC / 99,000 USDT

Gross profit/loss

-1000 USDT (~ -0.26 BTC)

-1000 USDT (~ -0.26 BTC)

Gross return on initial capital outlay

-1 %


The initial outlay of capital is small relative to the total position value. Consequently, a relatively small market movement will have a proportionately larger impact on the amount of funds supporting the position. It is important to remember that leverage can work both for and against you by magnifying both gains and losses.

Additional margin calls and unlimited losses

It is important to note that the liability for a holder of either a long or short Xena Contract position is not limited to the margin paid. If the market moves against a position or the margin levels are increased, then the holder of that position may be called upon to pay additional funds on short notice to maintain the position.

If the holder of a position fails to comply with a request for additional funds within the time prescribed, Xena Exchange may close out the position. In addition, the holder will still be liable for any further losses that may have resulted from the position being closed out.

Note: The potential for loss is not limited to the amount of money paid as initial and variation margins. Adverse market moves can result in losses being a multiple of the initial margin originally provided to support the position. For the holders of a short position, a continuing adverse market price movement (e.g., market price rise) can result in theoretically unlimited losses accumulating.

Xena Exchange doesn’t have a traditional margin call where the trader is asked to add collateral and the positions are liquidated, as is in case there’s not enough collateral on the account to cover the losses.

Liquidity risk

Market conditions (such as a lack of liquidity) may increase the risk of loss by making it difficult to effect transactions or close out existing positions.

Normal pricing relationships may not exist in certain circumstances. For example, normal pricing relationships may not exist in periods of high buying or selling pressure, high market volatility, or a lack of liquidity in the market for a particular Xena Contract. Gapping, whereby a market price falls or rises without the opportunity for trade, can result in significant losses even when a stop loss has been set because it may not be possible to execute the transaction at the nominated price during the gap.

Furthermore, there are limited circumstances in which Xena Exchange may expire and delist a contract.

Market disruptions / emergencies & issue resolution

Xena Contract transactions are subject to the Rules of Xena Contract trading. Under these rules, certain trading disputes between market participants (such as errors involving trading prices that do not bear a relationship to fair market or intrinsic value) may lead to Xena Exchange cancelling or amending a trade. In such situations, your consent is not required for the cancellation of a trade.

In some circumstances, underlying instruments or securities may be halted, suspended from trading, or have their quotations withdrawn from the exchange. These factors directly affect the value of a Xena Contract.