Dear valued customers,
At 10:00am Nov 14, 2018 (CET), OKEx delivered all BCH contracts according to the respective last traded price at 9:05am (CET). For the implementation details, please refer to: https://support.okex.com/hc/en-us/articles/360019782211
As some questions have been raised regarding the early delivery, we would like to provide a detailed explanation of the rationale behind.
A. Why did OKEx bring the delivery time earlier?
1. Due to the upcoming hard fork, strong volatility is observed in the BCH spot and futures markets. We expect an even greater volatility during the hard fork that may cause large-scale impacts, such as cascade liquidation.
2. The final outcome of the BCH hard fork is still unpredictable, and so are the responses of other constituent exchanges to the new forked coins. Between the hard fork and the delivery data of BCH1116 contract, OKEx may lack time to respond to the market.
B. Why were the last traded prices chosen as the delivery prices?
1. The underlying asset of OKEx BCH futures contracts (Bitcoin ABC) is not actually generated.
2. There is no Bitcoin ABC trading pair with enough market depth and trading volume to compose an index for delivery.
C. Why was there no heads-up about the early delivery?
1. It has come to our concern that an early announcement may make room for market manipulation and cause loss to our users. Therefore, we decided to give a short notice in order to maintain the fairness and stability of the market.
2. OKEx will never perform any early delivery without prior notice, except for extremely special cases like the BCH hard fork.
D. Why was the delivery time one hour after the trading stop time?
If the contracts had been delivered immediately after the trading stopped, the quantitative trading programs used by our high-frequency quantitative traders would have detected zero position of BCH futures contract and automatically sold BCH in the spot market. Such an influx of ask orders could have crushed the BCH spot market and caused huge volatility. As such, the one-hour interval was created to give room for quantitative traders to adjust their strategies and prevent potential volatility in the spot market.
As a neutral trading platform, OKEx will continue to maintain high transparency and stability and offer high-quality trading services to the digital asset market. Thank you for supporting OKEx as always.
Nov 14, 2018