Cryptocurrency exchange OKEx is to launch USDT Futures Trading, a linear futures contract. OKEx’s USDT futures contract is a virtual derivative product that is quoted and settled in USDT digital tokens, and each contract has a face value of a fixed amount of digital tokens.
Traders can long a position to profit from the increase of a cryptocurrency’s price, or short a position to profit from the decline of a cryptocurrency’s price. USDT pairs on OKEx include BTC, ETH, BCH, EOS, XRP, BSV, and TRX with a leverage level of 1-100x, both in fixed and cross-margin mode. OKEx provides a wider derivative portfolio with a greater variety of underlying currencies and more comprehensive functionality to meet users’ trading requirements.
Key features of OKEx USDT Futures Contracts include:
• Linear Contract – simpler for traders and does not need to hedge the margin risk of inverse contracts
• Leverage Level: 1-100x
• Supported pairs: BTC, EOS, ETH, LTC, BCH, XRP, ETC, BSV, TRX
• Trading Hours: 24/7
• Daily Settlement
The advantages of USDT Futures Contracts include:
• Efficiency and Low Costs – By only holding USDT, users can trade different USDT-margined futures contracts without the hassle of switching between cryptocurrencies.
• USDT Collateral is Comparatively Stable – by using USDT collateral for margin positions, users can reduce the risks induced by the volatility of the collateral’s price. Also, the calculations will be simpler.
• Intuitive Trading Experience – The whole trading experience for USDT-margined futures is very similar to spot trading. With the addition of leverage, it is easier for users to master the trading system.
“OKEx’s futures trading market has always been one of the top in the marketplace. As complex as it is, the financial instrument is always appealing to crypto traders, because we offer around-the-clock trading service, high leverage level and comprehensive risk management system that are important to all users,” says Lennix Lai, Financial Market Director at OKEx. “The addition of USDT Futures Trading demonstrates our commitment to offering a one-stop shop for professional and retail traders alike with the best user experience in the industry.”
“Most of the time, users are not willing to hold altcoins as margin, and they also see inverse contracts itself are complicated to understand. We see this linear contract would be an open door to many new retail traders,” added Lai. “At OKEx, we’ve developed a safe, reliable, and stable environment for cryptocurrency trading, and strive to offer new services based on our customers’ interests. We would continue to research and add stablecoin-based derivatives so to offer a simpler hedging instrument for traders who normally book their profit and loss in USD value.”
OKEx’s futures contract has a fixed delivery date, and the delivery price will be the mean value of the index the preceding hour before delivery. A mark price is used to calculate users’ Unrealised Profits and Losses (UPL) to reduce unnecessary liquidation in volatile market conditions. A daily settlement process at 16:00 Hong Kong Time (HKT) moves unrealised Profits and Losses (PnL) into realised PnL, increasing flexibility of capital utilisation. OKEx also offers hedging tools including insurance to assist traders in reducing risk.
To ensure index prices accurately reflect the spot market price of each token, OKEx has carefully selected the market prices of other major exchanges as the weighted index constituents for each token. These exchanges include Huobi, Bittrex, Coinbase and Binance. Measures will be introduced to handle abnormal situations.
OKEx has adopted an enhanced risk management system for derivatives, which includes:
• Mark Price – Well-established mark price system to effectively avoid huge fluctuations and unusual liquidation
• Tiered Maintenance Margin Ratio (TMMR) System – to avoid liquidation of large positions and its after-effect on market liquidity
• Forced Partial Liquidation Mode – to eliminate the market impact caused by a large number of liquidated orders
USDT Futures Contracts will be launched on 14 November, 2019, and simulation will start on November 5, 2019. USDT Perpetual Swap will be launched on 9 December, 2019, and simulation will start on 30 November, 2019.
