1. OKEx Futures Contract
OKEx futures contract is a derivative launched by OKEx to trade contracts of digital assets such as BTC and LTC. Each contract represents USD100 of BTC, or USD10 of other digital assets (e.g. LTC, ETH etc.). Investors may open long to profit from the increase of a digital asset's price, or open short to profit from the decline of a digital asset's price. The available leverages for futures contract are 0.01-125.
Specifications:
Subject: BTC, LTC, ETH, ETC, BCH, XRP, EOS, BTG / USD indices
Contract multiplier: USD1 per point
Quotation unit: index point
Minimum price intervals: BTC: 0.01 point; LTC & others: 0.001 point
Contract expirations: weekly, bi-weekly, quarterly，bi-quarterly
Contract value BTC: USD100; LTC & others: USD10
Leverage: e.g. BTC 0.01-100
Contract delivery time: 16:00, Friday of the expiry week
Settlement date: same as delivery date
Settlement method: settled by token
Fee schedule: please see here
2. OKEx Futures Contract's Design
OKEx futures contracts features: a) settled by BTC, b) contract value calculated in USD equivalent, c) manipulation proof system.
a) Settled by BTC
OKEx futures contract does not involve any fiat currency. It is not restricted by regulations and allows investors of any country or region to participate in trading.
b) Contract value calculated in USD equivalent
Traditional bitcoin futures contracts are expressed in USD. Each contract represents a certain amount of BTC. The biggest problem of these contracts is the leverage multiplier varies greatly due to price volatility, which makes them very difficult to perform the functions of hedging and arbitrage, especially for long term contracts.
In light of this problem, we have adjusted the contract value to USD100 of BTC instead. This allows the leverage multiplier to be fixed, in order to aid hedging and arbitrage.
The design greatly helps to stablize the profit or loss: invest USD 100, the profit / loss will be = USD100 * BTC price change * fixed leverage multiplier.
For example: the current price of BTC is USD500. An investor with a capital of USD500 buy a BTC at the current price, and opened 50 long contracts. When BTC rises to USD750 (50% increment), the profit of the contract will be 3.3333 BTC. If the investor sells the contract, he/she can receive USD2500 profit (5x of capital) by closing the position. When BTC rises to UDS1000, the profit of the contract will be 5BTC. The profit will be USD2500 after selling the contract (10x of capital). The leverage is very stable no matter how the price fluctuates. It helps investors to hedge and arbitrage to manage their funds.
c) Manipulation proof system
OKEx designed this system to prevent the common manipulation strategies circulating in the market.
Index computed from the indices of 6 major exchanges: By using the average of 6 major exchanges' indices for delivery computation, we prevented the possibility of market makers manipulating the index by influencing the trading price of one exchange.
Index computed from the indices of the last hour: Prevented market makers faking volume to control the trading price.
Flexible order price restriction: The price restriction is adjusted every minute based on the price of spot and futures markets, on the premise of not affecting investors creating normal orders, to prevent manipulators hammering the market to trigger forced liquidation of multiple accounts.
Enhanced forced liquidation system: Under extreme volatility, our system will take the average price as reference to prevent forced liquidation caused by a single abnormal transaction. It further prevents manipulators hammering the market to trigger forced liquidation of multiple accounts.