Index components weightage adjustment FAQ
1. What are the highlights of the changes?
You may refer to the table below for the changes:
| Changes | Before | After |
|---|---|---|
| 3 or more index components are available | Components are weighted equally |
Components are weighted by their pre-set weighted values |
| Component's price deviation limit | The deviation limit was ±3%. If a component's price deviates more than 3% from the median price of all components, the component's price will be taken at 97% or 103% | The deviation limit was updated from ±3% to ±2%. If a component's price deviates more than 2% from the median price of all components, that component's price will be taken at 98% or 102% of the median. |
| Component weights of each index | Equally distributed | Distributed according to the component exchange's trading volume and liquidity levels |
2. What are the principles for determining component weights?
Previously, all index components were weighted equally. Now different components will have different weights depending on their trading volume and liquidity conditions.
3. What indexes will be adjusted and when will this take place?
Most of the existing indexes will be adjusted by batch. For the exact timing of the adjustments and specific indexes to be adjusted, please stay tuned to our announcement page.
4. How can I know the latest component weight?
To find out the latest component weight, you can always open our OKX Index page and select the index you want to learn more about, and you will find the component's weight on our index details page (eg. https://www.okx.com/markets/index/btc-usdt).
5. What will be updated on API?
No changes to current API endpoints and no new endpoints will be added. The component weight (field name: "wgt") returned by "/api/v5/market/index-components" will be updated to the latest weights automatically.
6. How does it affect my trading strategies?
After the weighting adjustments, the components that have higher volume and better liquidity will have higher weights. Thus, these components will have more impact on index prices, which means index prices will be more stable and closer to fair market prices.
If you don't have any strategies based on index price, no action is required. If you have such strategies, the actions needed are subject to the specific strategies.