The index price is derived from the aggregate price of major spot exchanges to prevent price manipulation by a single exchange.
The reference markets for the platform include: Binance, Okex, CoinbasePro, Huobi, Woo.
The index price can be considered a fair spot price, and it is used to calculate the mark price (which is used for further calculation of unrealized profit and loss for each contract).
※ The actual profit and loss of the account is determined by the market price at the time of liquidation.
In cases of abnormal price fluctuations and extreme market conditions, the composition of the index price may be adjusted. Additional protective measures are also in place to avoid poor market performance caused by disruptions or connection issues in the spot market. The protection measures are as follows:
1. Single Price Source Deviation:
If the latest price from a single exchange deviates by more than 1% from the median price of all price sources, the weight of that exchange’s price will be set to zero.
2. Multiple Price Source Deviation:
If the latest price from more than one exchange deviates by more than 5%, the median price of all price sources will replace their weighted average and be used as the index price.
3. Latest Trade Price Protection:
When the index price and mark price matching system cannot obtain stable and reliable reference data sources, for contracts with a single index price component, the index may be affected (the index price may either remain unchanged or deviate significantly from the latest price). In this case, we will use the latest trade price protection mechanism to update the mark price until normal conditions are restored.
※ The latest trade price protection is a temporary method for switching the contract’s mark price, using the contract's latest trade price with certain limits, allowing the matching system to calculate unrealized profits, losses, and liquidations, while minimizing unnecessary forced liquidations during this period.