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Help Center Trading Price Protection Mechanism for Cryptocurrency Trading

Price Protection Mechanism for Cryptocurrency Trading

Price Protection Mechanism

The price protection mechanism is a key risk management measure designed to protect users and prevent market manipulation. To optimize risk control, our platform classifies trading pairs into two categories: major pairs and emerging pairs. Different price restriction rules apply to each category based on their respective risk profiles.

Category Major Pair Emerging Pair
Definition Trading pairs with an available index price. These pairs are generally more liquid and widely traded, so price discovery is not necessary. Markets and typically have lower liquidity. Prices are formed through market activity (price discovery), so traders should be mindful of slippage and volatility risks.
Limit Price Calculation

Maximum Buy Limit Price = min{Index Price * (1+X), Best Ask * (1+Y)}

Minimum Sell Limit Price = max{Index Price * (1-X), Best Bid * (1-Y)}

Notes:

  • Index Price: Calculated using prices from major exchanges.
  • Best Ask/Best Bid: The best available price on the opposite side of the order book on this platform.
  • X, Y: Risk control parameters.

Maximum Buy Limit Price = Best Ask * (1+Z)

Minimum Sell Limit Price = Best Bid * (1-Z)
Notes:

  • Best Ask/Best Bid: The best available price on the opposite side of the order book on this platform.
  • Z: Risk control parameter.
Special Scenarios

1. If the index price or best opposite price cannot be obtained, order prices are unrestricted until new prices are available.

2. If there are no orders on the opposite side of the order book for a trading pair, the limit price rules will be updated accordingly until such orders appear:

  • Maximum Buy Limit Price = Index Price * (1+X)
  • Minimum Sell Limit Price = Index Price * (1-X)

1. If the index price or best opposite price cannot be obtained, order prices are unrestricted until new prices are available.

2. If there are no orders on the opposite side of the order book for a trading pair, the limit price rules will be updated accordingly until such orders appear.

This price protection mechanism applies to all cryptocurrency spot trading. It covers all order types, including both limit and market orders, and applies to both trading directions (buy and sell).

- For limit orders:

  • Buy: If the order price exceeds the maximum buy limit price, the order will be rejected.
  • Sell: If the order price is below the minimum sell limit price, the order will be rejected.

- For market orders:

  • Buy: If the executed price exceeds the maximum buy limit price, the order will be cancelled.
  • Sell: If the executed price is below the minimum sell limit price, the order will be cancelled.

Note: This price protection mechanism does not apply to secondary market trading of RWAs (Real World Assets).

 

Price Protection Parameters

The current price protection parameters for all spot trading pairs supported on this platform are as follows:

Trading Pair

Category

Parameter X

Parameter Y

Parameter Z
BTC/USD

Major Pair

 12% 12% /
BTC/HKD

Major Pair

 12% 12% /
ETH/USD

Major Pair

 12% 12% /
ETH/HKD

Major Pair

 12% 12% /
USDT/USD

Major Pair

 12% 12% /
USDT/HKD

Major Pair

 12% 12% /

 

Note: The above data and parameters may be adjusted in real time depending on market conditions, without prior notice.

 

Example

Suppose the BTC/USD trading pair is classified as a major pair. The index price is 70,000 USD. A user places a limit buy order for BTC at 91,000 USD, and the current best ask in the BTC/USD order book is 90,000 USD. The platform's parameters X and Y are both set to 10%. The calculation is as follows:

Maximum Buy Limit Price = min{70,000 × (1 + 10%), 90,000 × (1 + 10%)} = 77,000 USD

Since the user's order price of 91,000 USD exceeds the maximum buy limit price of 77,000 USD, it surpasses the platform's price protection limit. Therefore, the order will not be placed successfully.

 

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