Overview: 

1. Scenarios Causing Inconsistent Positions
2. Scenarios Causing Inconsistent Filled Prices
3. Risk of Upstream Exchange Service Outage
4. Rules for Forced Liquidation in Copy Trading
 
Copy by position ratio is one of the first Copy Trading methods initiated by BingX. Copiers can copy trades by imitating a trader's position. Due to various objective and human factors, the platform cannot guarantee that the copied position will be exactly the same as that of the trader, nor can it guarantee that the executed price when Copy Trading will be exactly the same as that of the trader. Nonetheless, we will continue to optimize the performance of our system to optimally align positions as closely as possible.
Please carefully read the following risk statement before using the "copy by position ratio" feature:
 

1. Scenarios Causing Inconsistent Positions

  • The trader trades a trading pair that cannot be copied, and the position has unrealized P&L.
  • There are deposits and withdrawals in the trader's copy trading account.
  • Traders increase or decrease the position's margin.
  • Copiers increase or reduce Copy Trading funds.
  • Copiers turn off "Copy trader's positions immediately" while copying trades.
  • The trader's position is too large or the total position value of the copy trading group is too large, which triggers the maximum position limit for the copy trading group. While the position limit is triggered, the system will automatically open new positions if a copier increases their copy trading funds after being liquidated.
  • The rule for position limits can be viewed here: Copy by Position Ratio - Copy Trading Group Position Limits
  • The trading signal sent by the upstream/external exchange on which the trader trades was lost or delayed.
  • Due to differences in margin modes between copiers and traders, as well as market fluctuations, copiers might encounter situations where their funds may be insufficient to copy the trader's opening ratio and thus fail to copy an open order or fully copy the order. Closing positions are not affected.

2. Scenarios Causing Inconsistent Filled Prices

Since the Copy Trading orders are placed after receiving the trader's signals, the time of placing the Copy Trading order will be later than that of the trader. After the trader executes a trade and when the copiers' orders are placed, if the market happens to fluctuate violently, there will be a difference between the filled price of the trader's order and the copiers' orders. Copiers' filled price may or may not be more favorable than the trader's price depending on the market's direction.
Traders conduct high-frequency trading (Grid strategy or DCA strategy, etc.) where multiple trades are executed instantly. Copy trading only allows copying one order at a time, which means it takes longer to complete all the trades and will be more exposed to market changes.
The copy trading group's position value is too large or the trader's position is too large. As Copy Trading is executed at market price, when the order position is too large, it can lead to slippage in the filled price of copiers' orders owing to a lack of depth in the trading pair.

 

3. Risk of Upstream Exchange Service Outage

In CopyTrade Pro where traders share their trades executed on an external platform (upstream exchange), copiers' orders also need to be placed on the external platform. When the trading service of the upstream exchange is unavailable, copiers' orders will fail to be placed and executed until the service is restored. In case of such an outage, there may be a price and position difference between the trader and copiers. By proceed to copy orders, copiers consent to accept the potential losses caused by the outage.

 

4. Rules for Forced Liquidation in Copy Trading

In order to prevent users' equity from going negative, the "copy by position ratio" system has an independent set of rules for forced liquidation. Even if the trader's position is not forcibly liquidated due to factors such as instantaneous market fluctuations, if the Copy Trading account triggers forced liquidation, it will be liquidated.
The maintenance margin rates for traders on Perpetual Futures are subject to the Perpetual Futures' Trading Rules. Click to learn more.
For Perpetual Futures copiers using copy by position ratio, the maintenance margin rate for BTC/USDT is 0.31% and 0.37% for other trading pairs. Forced liquidation will be triggered when the copier's margin rate is equal to or lower than the maintenance margin rate.
Copy Trading account margin rate = (position margin + unrealized PnL) / net equity of Copy Trading account
 
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2023-10-01
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Risk Disclaimer
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