Price limit is one of the important risk management methods that protects investors and prevents the market from being manipulated. Without price limit, some traders can use small amount of capital and high leverage ratio to make the contract price fluctuate significantly, causing deficit for other users. On the other hand, if the price limit rule is too simple, it will lead to the lack of vitality in the market. Without premiums, there is no difference between spot trading and futures trading, defeating the purpose of the contract transaction.
1. Formula of price limit:
|
Period |
Max Buy Price |
Min Sell Price |
|
Within 10 minutes after the contracts launched |
Index *(1+X) |
Index *(1-X) |
|
Contracts launched 10 minutes later |
Min[Max(Index, Index *(1+Y)+ price movement average within the last 10 mins), Index *(1+Z)] |
Max[Min(Index, Index *(1-Y)+ price movement average within the last 10 mins), Index *(1-Z)] |
2. Parameters:
|
Contract type |
Coins |
X |
Y |
Z |
|
USDT & Coins Margined Futures (Weekly/Bi-weekly) |
All |
5% |
4% |
10% |
|
USDT & Coins Margined Futures (Quarterly/Bi-quarterly) |
All |
5% |
6% |
25% |
Z of the Weekly contract within 30 minutes before delivery is 3%
【The above data and indicators may be adjusted in real time according to market conditions, adjustments will not be notified in advance】
Note:
- Index refers to spot price index.
- Price movement average within the last 10 minutes is calculated as follows:
- Using the candlestick chart data of the contract and spot index within the last 10 minutes to calculate the (opening price + closing price)/2 of every minute, then calculate the difference between the contract and the index, then take the average value from the difference between the two within the last 10 minutes.
- The above rules is applicable to all futures and perpetual swap contracts (including USDT futures and coin-margined futures).
- Opening long or short contracts are also limited by these rules.
- For open long or close long orders: If the order price is higher than the max. bid price, price limit will be triggered;
- For open short and close short orders: If the order price is lower than the min. ask price, price limit will be triggered.