Perpetual contracts have become one of the most popular instruments in the digital asset derivatives market, offering traders the ability to speculate on price movements without an expiration date. Platforms like Huobi (now rebranded as HTX) provide structured rules and advanced trading features to ensure fair, efficient, and secure trading. This guide dives into the core mechanics of Huobi perpetual contract rules, covering settlement cycles, order types, position management, risk controls, and more — all while optimizing for clarity, SEO, and user engagement.
How Perpetual Contracts Work on Huobi
Perpetual contracts on Huobi operate 24/7, allowing traders to open and close positions at any time. Unlike traditional futures, these contracts don’t expire, making them ideal for both short-term speculation and longer-term directional bets.
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A key feature is the settlement mechanism. On Huobi, settlements occur every 8 hours at 04:00, 12:00, and 20:00 (GMT+8). During settlement, trading is temporarily paused for each specific contract until the process completes. Importantly, this interruption is per-asset, meaning if Bitcoin (BTC) is still being settled, other assets like Ethereum (ETH) may already be back online for trading if their settlement has finished.
This staggered recovery ensures minimal overall downtime and maintains liquidity across multiple markets.
Core Trading Actions: Open and Close Positions
All perpetual contract trades fall into two main categories: opening a position and closing a position. Each category supports both bullish and bearish strategies.
1. Buy to Open Long (Going Long)
When you believe the market will rise, you buy to open a long position. This increases your long exposure. For example, buying BTC/USDT perpetual contracts at $60,000 reflects a belief that prices will climb.
2. Sell to Close Long (Closing Longs)
If you no longer expect upward movement, you sell to close your long position. This reduces or eliminates your long exposure by offsetting existing contracts.
3. Sell to Open Short (Going Short)
Anticipating a price drop? You can sell to open a short position. This action creates a short position, profiting if prices decline.
4. Buy to Close Short (Closing Shorts)
To exit a short trade when you expect the downtrend to end, you buy to close the short position, effectively buying back what you previously sold.
These actions form the foundation of directional trading in perpetual markets.
Advanced Order Types for Precision Trading
Huobi offers several sophisticated order types designed to improve execution speed, reduce slippage, and automate strategy deployment.
1. Limit Orders
With a limit order, you specify both price and quantity. The order executes only when market conditions meet your criteria:
- You set the maximum price you’re willing to pay (for buys).
- Or the minimum price you’re willing to accept (for sells).
Limit orders support three execution modes:
- Post Only: Ensures you act as a maker; order cancels if it would immediately match.
- Fill or Kill (FOK): Must be filled entirely upon placement or canceled.
- Immediate or Cancel (IOC): Executes what it can immediately; remaining volume is canceled.
By default, limit orders remain active until manually canceled.
2. Trigger (Conditional) Orders
Also known as plan orders, these allow you to set a trigger price. When the latest market price hits your trigger level, the system places a predefined limit order automatically — perfect for setting entries or stop-losses ahead of time.
3. Counterparty Price Orders
Choose this mode to instantly trade at the best available opposing price:
- Buyers get the current lowest ask (sell 1).
- Sellers receive the highest bid (buy 1).
You only input quantity; the system fetches the counterprice in real-time.
4. Best N Levels (“Optimal N Tiers”)
This enhances counterparty pricing by pulling from deeper market depth:
- Select Best 5, Best 10, or Best 20 tiers.
- System automatically matches against multiple levels up to your chosen depth.
- No need to manually enter prices — just pick tier depth and quantity.
Ideal for fast-moving markets where speed matters.
5. Lightning Close (Flash Close)
Designed specifically for rapid exits, lightning close uses the best 30 price levels to execute your close order quickly. Any unfilled portion becomes a limit order at the last executed price, ensuring partial fills without total failure.
This minimizes slippage during volatile swings and improves risk management.
Position Management & Averaging Logic
Once a trade executes, you hold a position. Key points include:
- All long positions in the same contract are merged into one average position.
- Same applies to short positions.
- Maximum of two positions per contract: one long, one short.
For example:
- Open 1 BTC contract at $10,000.
- Later open 2 more at $15,000.
- System combines them into a single long with an average entry price.
Average Cost Calculation Example:
Assume each contract = $100 face value:
- First: $100 / $10,000 = 0.01 BTC
- Second: $200 / $15,000 ≈ 0.0133 BTC
Total position = 0.0233 BTC for $300 → Average = ~$12,857
When closing, profits/losses are calculated using this weighted average cost basis, not FIFO or specific lot tracking.
Risk Controls: Position Limits & Safety Measures
To prevent market manipulation and systemic risk, Huobi enforces strict position and order limits:
- Maximum allowable position size per user per contract.
- Cap on single-order quantities for opening or closing.
- Dynamic adjustments based on market volatility and liquidity.
If your position or pending orders exceed thresholds:
- Platform may require order cancellation.
- May enforce forced liquidation.
- Can restrict further opening or reduce total exposure.
These measures protect both individual traders and the broader market ecosystem.
Frequently Asked Questions (FAQ)
Q: How often are Huobi perpetual contracts settled?
A: Every 8 hours — at 04:00, 12:00, and 20:00 (GMT+8). Trading pauses briefly during settlement.
Q: Can I hold both long and short positions simultaneously?
A: Yes. The system allows one long and one short position per contract type.
Q: What happens if my close order doesn’t fully execute?
A: With lightning close, unexecuted portions become limit orders at the last matched price.
Q: Are there fees for holding perpetual contracts?
A: There’s no direct fee, but funding payments occur every 8 hours — paid between longs and shorts based on rate differentials.
Q: How is profit calculated when closing part of a position?
A: Based on the average entry price of the entire position, regardless of which "lot" was opened first.
Q: Can I automate my entry and exit strategies?
A: Yes — use trigger orders to set conditional buys/sells based on price movements.
Why Understanding Contract Rules Matters
Trading perpetuals isn't just about predicting price — it's about mastering mechanics. Knowing how settlements work, how orders execute, and how positions are averaged helps avoid costly mistakes. Whether you're scalping or holding for trends, aligning your strategy with platform rules boosts consistency and control.
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Remember: successful trading means going with the trend, managing risk wisely, and acting only when signals are clear. Patience protects capital — and over time, disciplined execution leads to sustainable gains.
Final Thoughts
Huobi’s perpetual contract framework balances accessibility with professional-grade functionality. From flexible order types to intelligent risk management systems, every rule serves to create a transparent and resilient trading environment.
Whether you're new to derivatives or refining your edge, understanding these foundational rules empowers smarter decisions — and smarter decisions drive better outcomes.
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