Upgrade on Liquidated Futures Position Price Calculation and Price Change Strategy for Liquidated Futures Positions

Publikováno dne 20. 2. 2019Aktualizováno dne 14. 12. 2023Doba čtení: 3 min

Dear valued customers,

To improve the transaction efficiency of liquidated futures positions and minimize the clawback rate, we have upgraded our liquidated futures position price calculation and the price change strategy for liquidated futures positions at 07:40 Feb 20, 2019 (CET, UTC +1). Details as follows:

1.Glossary

a.Forced-liquidation Price: When the market price reaches the forced-liquidation price and a user’s margin is lower than the required level, force-liquidation will be triggered.

b.Bankruptcy Price: The price at which a user loses all margin

c.Entrusted Price of Liquidated Position: The price at which a liquidated position is put into the market by our forced-liquidation engine after forced-liquidation

d.Trading Price of Liquidated Position: The actual transaction price of the liquidated position in the market

2.Upgrade on Liquidated Futures Position Price Calculation

a.Objective:

Creating a more reasonable entrusted price, instead of using bankruptcy price, for reselling liquidated positions taking account of factors such as market depth and basis, so as to minimize market impact, increase return, and grow the insurance fund.

b.Rationale

When a position is forced-liquidated and taken over by the forced-liquidation engine, it will not be put into the market at the bankruptcy price directly. Instead, the entrusted price will be calculated based on current market depth, basis, bankruptcy price, and index price to increase transaction efficiency and return to cover the loss.

3.Price Change Strategy for Liquidated Futures Positions

a.Objective:
To avoid extended margin call loss and clawback when a one-sided market takes place

b.Rationale:
After the forced-liquidation engine has put a liquidated position to the market, the system will keep monitoring its trading status. If the order has not been fulfilled after a long period of time, the engine will cancel the unfulfilled order and re-post at a new price and amount based on the latest market depth, basis, bankruptcy price, and index price. This process will continue until the liquidated position is completely fulfilled.

4.Inquiry for Liquidated Positions and Margin Call Loss

a.After the price change, some positions may be transacted at lower prices than their bankruptcy prices (for closed long positions; or higher for closed short positions). The margin call losses caused by the difference between the bankruptcy price and transaction price will be shown in the forced-liquidation list.

b.The margin call losses caused by liquidated positions after price changes will be cleared with the margin call losses from unfulfilled liquidated positions altogether. The total loss will be compensated by the insurance fund. If the fund falls short, the remaining loss amount will be socialized through our clawback mechanism.

c.The total margin call loss can be checked on the forced-liquidation page:

= Margin call losses of fulfilled liquidated positions + Margin call losses of unfulfilled liquidated positions

For inquiry regarding the above changes, please email to futures@OKX.com.

Thank you for your continued support and we assure you of our best service at all times.

Regards,

OKX

Feb 20, 2019