Introduction to Pre-market Futures

1. Overview

Pre-market Futures, OKX’s pre-market trading platform, allows users to trade expiry futures on crypto that have not yet been officially launched or listed. These pre-market expiry futures are USDT-settled. The goal of OKX’s pre-market trading feature is to provide users with a secure and reliable platform for participating in the price discovery of new crypto.

2. Product mechanisms

Pre-market Futures mechanisms differ from standard futures trading in several ways. Please make sure you understand these mechanisms and risks before participating.

2.1 Pre-Market Future Pricing

Prior to a spot listing, the price for pre-market futures will be based on the last price of the corresponding pre-market futures on OKX. Once the underlying token is listed for spot trading, OKX will apply the index rule using the spot price(s) of exchange(s) according the methodology set out here. This index price is ultimately used to calculate the settlement amount on expiry.

2.2 Settlement Mechanism

Pre-market futures are USDT-settled futures that will be settled on the expiration date based on a specific settlement price.

2.2.1 Settlement date

1. If the new crypto is listed as planned, the pre-market future contracts will be settled 3 hours after the crypto is listed on the spot market. If the listing time changes, then the contract settlement time changes accordingly. Stay informed of any changes via our announcements.

2. If the crypto project team cancels the crypto issuance, fails to announce a crypto issuance plan within six months, or due to other risk control issues, OKX may decide not to list the crypto on the OKX spot market. In such cases, OKX may delist the futures in advance. The specific settlement date will be announced separately and displayed on the trading page once determined.

2.2.2 Settlement Price

1. If the new crypto is issued as planned and will be listed on the OKX spot market:

   1. Index price: OKX will apply the index rule using the spot price(s) of exchange(s) according the methodology set out here.

   2. Settlement price: OKX will settle the futures contract positions at the arithmetic average price of the corresponding OKX index price timed at 1 hour prior to the settlement. If the traded price displays abnormalities in the hour preceding the settlement, OKX may adjust the final settlement price to a reasonable level for settlement.

2. If the crypto project team cancels the crypto issuance or no issuance plan is announced within six months, or if OKX decides not to list the crypto on the spot market for other risk control reasons:

   1. Actual settlement price = Tick size

   2. Estimated settlement price = Rolling average price over the last hour before settlement , calculated every 200 milliseconds (Index price = Last price every 200 milliseconds).

   3. OKX retains sole discretion to update the settlement mechanism.

2.2.3 Position limits

To reduce settlement risk, within the hour before pre-market futures settlement, users can no longer increase their positions and can only make the following closing orders or reverse orders to reduce their positions.

1. Hedge mode: place a closing order.

2. One-way mode: place a reduce-only order, or place a reverse order/pending order with quantity no greater than current position. If the quantity of accumulated reverse orders (including pending orders) is greater than the current position, then no new reduce-only orders can be placed. Please check pending orders before placing a new one.

2.3 Price limits

Before October 1, 2024:

After pre-market contract generation:

Highest price of buy order = Average mid price of the past hour × (1 + 15%)

Lowest price of sell order = Average mid price of the past hour × (1 – 15%)

Within 60 minutes before settlement:

Highest price of buy order = Index Price × (1 + 5%)

Lowest price of sell order = Index Price × (1 – 5%)

After October 1, 2024:

After pre-market contract generation:

Highest price of buy order = Average mid price of the past hour × (1 + 15%)

Lowest price of sell order = Average mid price of the past hour × (1 – 15%)

After spot listing and before the index component transition:

Highest price of buy order = Index Price × (1 + 15%)

Lowest price of sell order = Index Price × (1 – 15%)

After index component transition:

Highest price of buy order = Min [Max (Index, Index ( 1 + 15%) + Avg premium in last 2 mins), Index x (1 + 15%)]

Lowest price of sell order = Max [Min (Index, Index x (1 – 15%) + Avg premium in last 2 mins), Index x (1 – 15%)]

Final hour before the settlement:

Highest price of buy order = Min [Max (Index, Index ( 1 + 5%) + Avg premium in last 2 mins), Index x (1 + 5%)]

Lowest price of sell order = Max [Min (Index, Index x (1 – 5%) + Avg premium in last 2 mins), Index x (1 – 5%)]

Mid price = (Best bid price + Best ask price) / 2. Price limits are calculated every minute.

For more details: https://www.okx.com/trade-market/info/futures

2.4 Mark price

Before October 1, 2024:

Mark price cap = Highest price of buy order in limit price.

Mark price floor = Lowest price of sell order in limit price.

Mark price

= Moving average of mid price,

= Moving average of (Best ask of contract + Best bid of contract) / 2.

After October 1, 2024:
Mark price cap = Highest price of buy order in limit price.

Mark price floor = Lowest price of sell order in limit price.

After the release of premarket future product:

= Moving average of mid price

= Moving average of (Best ask of contract + Best bid of contract) / 2

After spot listing and before the index component transition:

= beta x (Index price + Moving average of basis) + (1 – beta) x Moving average of mid price

*Beta is a figure between 0 and 1 which indicates the time weight.

After the transition period during the index component change:

= Index price + Moving average of basis

= Index price + Moving average of (midPrice – IndexPrice)

= Index price + Moving average of [(Best ask of contract + Best bid of contract) / 2 – IndexPrice]

2.5 Position limits

For pre-market futures, the position size of the user’s isolated margin positions will be subject to tiered limits and user-specific position limits.

2.5.1 Tiered position limits

The maximum position size is determined by the user’s selected leverage tier. The maintenance margin is calculated based on the position size and the corresponding tier’s maintenance margin requirement (MMR).

Note that the maximum position size in the tier table is in USD and needs to be converted to contract size:

Contract number = USD value / Crypto price / Contract size / Contract multiplier (refer to the listing announcement for specific values).

2.5.2 User-specific position limits

The user’s position size must comply with both tiered position limits and user-specific position limits.

2.6 Liquidation mechanism

The liquidation mechanism for pre-market futures is the same as for standard futures. For more details, refer to:

• Tiered maintenance margin ratio rules: https://www.okx.com/help/v-tiered-maintenance-margin-ratio-rules

• System Liquidation Mechanism: https://www.okx.com/help/vi-system-liquidation-mechanism

• Introduction to Auto-deleveraging (ADL): https://www.okx.com/help/iv-introduction-to-auto-deleveraging-adl

  • Pre-market trading is subject to applicable ADL conditions

2.7 Trading and settlement fees

Trading fees are the same as standard expiry futures. For more details, refer to: https://www.okx.com/fees

The settlement fee is 1%, subject to adjustment as announced.

2.8 Contract elements

2.9 Price determination

Prices in the pre-market futures are determined by market behavior and may not accurately reflect the actual listing price of the new crypto.

Risk warning: The project has not yet finalized the crypto issuance plan, and the total supply is uncertain. Changes in issuance volume may cause market price fluctuations. Users should monitor market information, exercise risk control, and trade cautiously.

2.10 Risk disclaimers

Whilst we strive to provide a better trading experience, trading pre-market futures is highly risky as the pre-market is more prone to lower liquidity, higher price volatility, and users are subject to increased liquidation risk. The price of pre-market futures has enhanced sensitivity to market speculation and information and you are purchasing this product at your own risk.

Not all tokens being traded in pre-market futures will ultimately be listed on OKX.

It should be noted that there are three pricing mechanisms for pre-market Futures linked to the listing of the corresponding underlying token. Pre-market futures may be delisted prior to expiry and settlement price shall be calculated in accordance with below.

I. Pre-listing period: Before the listing of the underlying token, the settlement price shall be calculated upon the average of the last traded price, within the last hour before the settlement, of the corresponding pre-market futures.

II. Post-listing period: If such underlying token has been listed on OKX, the settlement price shall be calculated based on the average of the weighted average of the spot price(s) of the exchange(s), within the last hour before the settlement time. This price mechanism also applies upon expiry of the relevant Pre-Market Futures .

III. Transition period between pre-listing period and post-listing period (if applicable): To prevent sudden price movement after the announcement of the listing of the underlying token, OKX may engage in discretionary methods including, without limitation, the change of mark price and position limits.

At the time of listing and anytime after the token is listed, the price of pre-market futures may differ from the price of its underlying spot token. You should closely monitor the latest status of the underlying tokens on OKX to make appropriate adjustments to your orders. OKX retains sole discretion to adjust the listing of the underlying token, or change the pricing and settlement mechanism, extend or terminate the futures contract and the expiry date for the pre-market futures contract.

To minimize disruptive trading experiences, we have engaged in various protective mechanisms, including adjusting auto-deleveraging mechanisms. You are solely responsible for monitoring your orders and positions to prevent liquidation.

OKX may suspend such trading pre-market futures at any time and at its sole discretion. For more details, please refer to the OKX Terms of Service and Risk & Compliance Disclosure."