Get Started
How to deposit funds?
You can only deposit BTC, either on-chain or through a Lightning Network payment.
What can I trade?
You can trade LNM Futures and Bitcoin Options. Your position is immediately opened after paying a margin in BTC.
What is the margin?
Trade margin
Trade margin is the Bitcoin collateral deposited to secure a derivatives position. On LN Markets, each position has its own dedicated trade margin, allowing traders to manage multiple positions with different margin policies.
For a given trade margin and leverage, the position size (quantity) and liquidation price are automatically calculated:
Trade margin is denominated in satoshis (sats), where 1 BTC = 100,000,000 sats.
Maintenance margin
The maintenance margin is the minimum balance required to keep a position or order active. It includes a reserve to cover the costs of opening and closing the position.
Total margin
The total margin required to open a position consists of: Total Margin = Trade Margin + Maintenance Margin
When orders are executed, fees are deducted from the maintenance margin. For market orders, fees are deducted immediately upon placement due to instant execution.
Trading fees
Trading fees are tier-based, decreasing as your trading volume increases.
Your tier is based on your 30-day cumulative volume:Check your Profile to view your current Tier.
Current tiers:
| Tier | Tier 1 | Tier 2 | Tier 3 | Tier 4 |
|---|---|---|---|---|
| 30-day cumulative volume | 0 | > $250k | > $1,000k | > $5,000k |
| Trading fee | 0.1% | 0.08% | 0.07% | 0.06% |
Check your Profile to view your current Tier.
Trading fee calculation process
-
Initial Setup: Total fee paid = 0 Maintenance margin = Opening fee reserved + Closing fee reserved Opening fee reserved = (Quantity / Entry price) × Tier1 fee Closing fee reserved = (Quantity / Initial liquidation price) × Tier1 fee
-
At Position Opening: Total fee paid = Opening fee Maintenance margin = Opening fee reserved + Closing fee reserved - Opening fee (Opening fee reserved and opening fee can be different in case of change of Tier fee)
-
At Position Closing: Total fee paid = Opening fee + Closing fee Maintenance margin = Opening fee reserved + Closing fee reserved - (Opening fee + Closing fee) (Opening fee reserved and closing fee reserved can be different in case of change of Tier fee) User receives: P&L + Margin + Maintenance margin
⚙️ Example:
For a long position with:
- Quantity: $60
- Trade margin: 10,000 sats
- Leverage: 10x
- Entry price: $60,000
- Initial liquidation price: $54,545
Calculation:
- Opening fee reserved = 100,000,000 X (60/60,000)X 0.1% = 100 sats
- Closing fee reserved = 100,000,000 X (60/54,545) X 0.1% = 60 sats
- At the time of trading, if there is no change of tier fee, total fee paid = 100 sats and maintenance margin = 100 + 60 - 100 = 60 sats
- When closing the position, if there is no change of tier fee, total fee paid = 100 + 60 = 160 sats and maintenance margin = 0
Funding fees
Funding fees in perpetual futures maintain the price of the perpetual contract close to the price of the underlying asset, known as the “spot price”. Without an expiry date, as in traditional futures, perpetual futures require a mechanism to align the contract price with the underlying asset’s market price.
The funding rate calculation is an aggregation of individual rates determined using the same methodology employed to construct the price.
⚙️ Example:
| Exchange | BitMEX | Bybit | Binance | Deribit | LNM |
|---|---|---|---|---|---|
| Weight | 25% | 25% | 25% | 25% | - |
| Funding rate | 0.02% | 0.05% | 0.03% | 0.05% | 0.0375% |
Funding fee calculation process
Funding fees are payments exchanged between traders holding long (buy) and short (sell) positions:
- When funding rates are positive:
- Long positions pay the fee
- Short positions receive the fee
- When funding rates are negative:
- Long positions receive the fee
- Short positions pay the fee
This mechanism helps maintain price alignment between the futures contract and the spot market, while also indicating market sentiment. A positive funding rate suggests bullish market conditions, while a negative rate indicates bearish sentiment.
Funding fees are:
- Updated every 8 hours (00:00, 08:00, 16:00 UTC) or (12:00 AM, 8:00 AM, 4:00 PM UTC)
- Applied only to running positions
- Deducted from the position margin for paid funding fees
- Added to your balance for received funding fees
- Visible in the Funding section of your wallet, showing both received and paid fees
⚙️ Example:
For a funding rate of +0.01% (positive rate):
Long position:
- Quantity: $10,000
- BTCUSD rate: $60,000
- Funding fee paid = (10,000/60,000) × 0.01% × 100,000,000 = 1,667 satoshis
Short position:
- Quantity: $10,000
- BTCUSD rate: $60,000
- Funding fee received = 1,667 satoshis
For a funding rate of -0.01% (negative rate):
Long position:
- Quantity: $10,000
- BTCUSD rate: $60,000
- Funding fee received = 1,667 satoshis
Short position:
- Quantity: $10,000
- BTCUSD rate: $60,000
- Funding fee paid = 1,667 satoshis
Users can track all funding fees paid and received in the Funding section of their wallet.
How to withdraw funds?
You can withdraw BTC, either on-chain or through a Lightning Network payment.
On-chain Bitcoin withdrawals are processed manually.
Are there trading limits on LN Markets?
Yes, there are currently trading limits in place on the quantity traded (i.e. the number of contracts traded, each worth USD 1):
- The maximum quantity per trade is USD 500,000.
- The maximum quantity per account is USD 10,000,000.
Are there any geographical restrictions to use LN Markets?
Yes, an IP address blocking for US residents is effective on LN Markets.
Disclaimer
LN Markets is an alpha software under active development since Mar 11, 2020.
Please use with care, LN Markets comes with no guarantees, use it preferably on Testnet or at your own risk.