Overview
Pre-market trading allows users to trade perpetual contracts for digital assets that have not yet been officially listed. These contracts are settled in USDT. The primary goal of pre-market trading is to offer a secure and reliable platform for users to engage in the early price discovery of new tokens.
Product Mechanism
The pre-market trading environment differs from the standard futures market in several key aspects. It is essential to fully understand these unique mechanisms and associated risks before participating.
Index Price
Before a token is officially listed on the spot market, the latest transaction price from its pre-market perpetual contract is used as its index price.
After the token is listed for spot trading, the index is constructed using the spot prices from several major exchanges. The final settlement price is then determined by calculating the arithmetic average of this index price during the hour leading up to the contract's settlement time.
Settlement Mechanism
Pre-market contracts are USDT-settled futures products. All open positions are automatically settled at a specific delivery price upon the contract's expiration date.
Settlement Time
If a new token is launched as planned, the pre-market contract will typically settle 3 hours after its spot market listing goes live. The settlement price is calculated 2-3 hours after the spot listing. Should the official listing time change, the contract's settlement time will be adjusted accordingly. All changes will be announced officially.
In cases where a project cancels the token launch, fails to announce a launch plan within six months, or if other risk control issues arise, OKX may decide to delist the contract early. The specific settlement date will be communicated via an official announcement and displayed on the trading page once confirmed.
Settlement Price
For a normally launched token:
- Index Price: OKX constructs an index using the spot prices from at least three major exchanges.
- Final Settlement Price: The arithmetic average of the OKX Index over the hour preceding settlement is used to settle all user positions for that contract.
If the index price is subject to abnormal manipulation during this critical period, OKX reserves the right to adjust the final settlement price to a reasonable level.
If a token launch is canceled or indefinitely postponed:
The actual settlement price will be equal to the minimum price movement (tick size) of the contract.
The estimated settlement price is a rolling average of the index price (which equals the latest trade price) taken every 200 milliseconds during the hour before settlement.
OKX also retains the right to add other "index component exchange spot prices" to the index calculation.
Position Limits Before Settlement
To mitigate settlement risks, users cannot increase their positions during the final hour before a pre-market contract settles. Only actions that reduce existing positions are permitted:
- In the "Open/Close" mode: Users can only place orders to close existing positions.
- In the "Buy/Sell" mode: Users can only place reduce-only orders, or place orders in the opposite direction that do not exceed the current position size.
Note: If the cumulative size of orders in the opposite direction exceeds your current holdings, you will be unable to place further reduce-only orders. Please check your open orders before submitting new ones.
Price Limit Rules
After a pre-market contract is generated:
- Maximum Buy Order Price = 1-Hour Average Mid Price × (1 + 15%)
- Minimum Sell Order Price = 1-Hour Average Mid Price × (1 – 15%)
Within the 60 minutes leading to settlement:
- Maximum Buy Order Price = Index Price × (1 + 5%)
- Minimum Sell Order Price = Index Price × (1 – 5%)
The mid price is calculated as (Best Bid Price + Best Ask Price) / 2. These limits are recalculated every minute.
Mark Price
The Mark Price is bound by the price limits:
- Mark Price Ceiling = Maximum Buy Order Limit Price
- Mark Price Floor = Minimum Sell Order Limit Price
The Mark Price is calculated as a moving average of the contract's mid price:
Mark Price = Moving Average of (Contract Best Ask Price + Contract Best Bid Price) / 2.
Position Limit Rules
For pre-market contracts, the maximum open position size for a user's isolated margin position is restricted by both tier-based limits and user-level limits.
Tier-Based Limits
The maximum position size a user can open is determined by the selected leverage level and its corresponding maximum allowable position size in the tier table. The maintenance margin required for a position is calculated by multiplying the position size by the Maintenance Margin Rate (MMR) corresponding to its tier.
Example Tier Table (for illustration):
| User Level | Max Open Position (USD) | Maintenance Margin Rate (MMR) | Initial Margin Rate | Max Leverage |
|---|---|---|---|---|
| 1 | 5,000 | 2.0% | 2.0% | 50x |
| 2 | 10,000 | 2.5% | 2.5% | 40x |
| 3 | 15,000 | 3.0% | 3.0% | 33x |
| 4 | 20,000 | 4.0% | 4.0% | 25x |
| 5 | 30,000 | 5.0% | 5.0% | 20x |
Trading Hours
Pre-market contracts are traded 24 hours a day, 7 days a week.
Contract Type
These are futures contracts with a predetermined settlement date. The exact delivery date will be confirmed and announced in the future.
On Pricing
Prices in the pre-market are determined solely by the market actions of buyers and sellers. It is crucial to understand that this price may not accurately reflect the final price at which the new token is officially launched.
Risk Warning: The project team may not have finalized its token generation event plans. The total supply is often uncertain, and changes to it could cause significant market price fluctuations. Users must stay informed about market developments and practice careful risk management when trading.
Risk Disclosure
OKX is committed to providing a superior trading experience. However, trading pre-market contracts carries significant risks. These markets are often characterized by lower liquidity, higher price volatility, and consequently, a greater risk of liquidation for traders.
Not all tokens traded in the pre-market will ultimately be listed on OKX. OKX reserves the right to adjust listings, extend or terminate contracts, and change settlement dates at its sole discretion.
It is important to note that pre-market contracts have a fixed expiration date tied to the listing of the underlying token. Settlement occurs only in USDT. You are not trading the actual underlying token and should not expect to receive it upon contract expiration.
Furthermore, because trading occurs before the official listing of the related token, there is no clear, identifiable price source for the underlying asset. Therefore, the contract's price may differ significantly from the token's price at and after its listing.
OKX may suspend trading for such pre-market contracts at any time at its sole discretion.
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Frequently Asked Questions
What is pre-market trading?
Pre-market trading involves buying and selling futures contracts for digital assets that have not yet been officially listed on a spot exchange. It allows for early price discovery before the public launch of a token.
How is the settlement price determined for a pre-market contract?
For a successfully launched token, the settlement price is the arithmetic average of the index price (composed of spot prices from major exchanges) during the hour before the contract's settlement time. OKX may adjust this price if manipulation is suspected.
What happens if a token is never listed?
If a project cancels its token launch or fails to announce plans within six months, OKX may delist the contract early. The settlement price in this scenario is typically set to the contract's minimum price movement (tick size), which is effectively zero, leading to a total loss for long positions.