OKX Pre-market Trading: Preferred Tool for New Coin Contract Trading, Leading Frontier Innovation

Bitcoin and Ethereum dominated the early cryptocurrency market, but with the rapid iteration and increasing maturity of the industry, more and more emerging projects have begun to emerge. The new coin market is an important component of the cryptocurrency field, playing a key role in the innovation and development of the industry.

The changes in the market capitalization share of the new coin market reflect the progress of innovative technologies and the expansion of application scenarios, driving the evolution of the cryptocurrency industry landscape. Its significant market penetration potential has enhanced global awareness and acceptance of cryptocurrencies. For example, emerging applications such as DeFi and NFTs meet users' demands for financial innovation and digital art, further promoting the development of the new coin market. As of July 2024, the market capitalization share of the new coin market is approximately 30%, reflecting its important position in the overall market.

In response to the enthusiasm of active users for participation in the new coin market, OKX has officially launched the pre-trading feature, allowing users to trade settlement contracts for tokens that have not yet been listed, aiming to provide a safe and reliable platform for users to participate in the price discovery of new tokens and lead the innovation of trading tools in the industry. Users can experience this feature immediately by upgrading the OKX APP to version v6.7* or above.

About Pre-Trading

The settlement contracts for OKX pre-trading are essentially USDT-based settlement contracts, which are usually settled before the new tokens are listed on the spot trading market. Through OKX pre-trading, users can trade before the tokens are officially listed, allowing them to buy and sell the digital asset settlement contracts that the platform will list, while enjoying 2x leverage.

Generally speaking, during the pre-trading phase, users can profit from price fluctuations by going long or short; during the contract settlement phase, OKX pre-trading contracts will be settled at a specific price on the settlement date; however, during the token listing phase, there is no guarantee that the tokens involved in OKX pre-trading contracts will ultimately be listed in the spot market.

From the perspective of industry development, trading settlement contracts for tokens that have not yet been listed not only provides an effective price discovery and liquidity enhancement mechanism but also offers better risk management tools and market participation opportunities for users and project parties.

It is worth noting that the OKX pre-trading market has some product mechanisms that differ from the standard settlement market. Next, we will highlight some key mechanisms for interpretation. Among them, the index price uses the latest transaction price of the OKX pre-trading settlement contract as the index price, which is also used to determine the settlement price of the contract.

Core Element Interpretation

A common concern among users is, will OKX pre-trading affect the subsequent listing price of tokens on OKX? In fact, the price in the OKX pre-trading market is determined by the market behavior of buyers and sellers, and this price may not accurately reflect the actual issuance price of the new tokens. Although pre-trading can reflect market expectations, the listing price of the tokens themselves may be influenced by various other factors, and the two are not directly related.

In addition, the following table summarizes the core elements of OKX pre-trading settlement contracts, and we will interpret a few of them, such as settlement time and price.

First, settlement time. 1) If the new token is normally issued and confirmed to be listed on the OKX spot market, the pre-trading settlement contract will be settled before the token is listed on the spot market. The specific settlement date will be announced separately, and once the settlement time is determined, it will be displayed in the settlement date on the trading page.

2) If the project party cancels the new token issuance or does not announce a token issuance plan within six months, or if the platform decides not to list the token on the OKX spot market due to other risk control issues, OKX may terminate the contract early, and the specific settlement date will be announced separately. Once the settlement time is determined, it will be displayed in the settlement date on the trading page.

3) For API users: The expTime field of the trading product (instruments) related interface returns the settlement date. The settlement date is subject to change, and API users should monitor changes to expTime through the push interface or scheduled query interface.

Second, leverage multiple. The current leverage supported by OKX pre-trading is 0.01 ~ 2 times, with a maximum of 2 times.

Third, tiered position limit rules. The maximum position size that users can open is equal to the maximum position amount corresponding to the leverage multiple selected by the user in the tiered position table. The maintenance margin amount for the position equals the maintenance margin rate (MMR) corresponding to the user's position size in the tiered position table multiplied by the user's position size.

Note that the maximum position size in the above tiered position is in USD and needs to be converted to specific contracts based on the token price and contract face value:

Number of contracts = USD value / token price / contract face value / contract multiplier (specific contract number reference based on the listing announcement)

Fourth, position limit rules. For pre-trading contracts, users can open position sizes that meet the tiered position limit rules while also satisfying the user position limit size. For USDT-based contract designated market maker (DMM) users, the position limit size is 100,000 USD; for non-USDT-based contract designated market maker (DMM) users, the position limit size is 10,000.

Dual Nature: Highlights and Risks

Through OKX pre-trading, users can meet various needs from different dimensions. For example, they can participate in trading before the token is officially listed, positioning themselves to capture market opportunities. Understanding the expected value of the token before its official listing, the activity and market response in pre-trading can enhance community confidence in the token project, validating market demand and project potential through actual trading data, increasing price discovery opportunities and trading transparency.

Additionally, locking in prices before the token is officially listed allows users to hedge against price volatility risks using settlement contracts, thus avoiding uncertainties brought by market fluctuations. Users can also explore more trading strategy options and flexibly adjust their trading combinations based on market conditions, etc. In summary, through OKX pre-trading, users can make more proactive and flexible trading decisions in the cryptocurrency market, enjoying more market opportunities and higher trading efficiency.

Although OKX continues to strive to provide you with a better trading experience, trading pre-contracts carries high risks, as the pre-trading market is more susceptible to reduced liquidity and higher price volatility, and users face greater liquidation risks. Not all tokens traded in pre-contracts will ultimately be listed on OKX.

Currently, OKX reserves the right to adjust the listing, extend, or terminate contracts and the contract settlement date at its discretion.

It is important to note that pre-contracts have a fixed expiration date, which is linked to the listing of the relevant underlying tokens. At expiration, they are settled only in USDT, so users are not trading the underlying tokens and should not expect to receive the underlying tokens at the contract expiration. Furthermore, since trading occurs before the relevant tokens are listed, there is no clearly identifiable price source for the underlying tokens, so the contract price may differ from the price of the underlying tokens at and after listing. OKX may decide at any time to suspend or terminate such pre-contract trading.

User Guide

How to use OKX pre-trading?

1) Open the OKX App, click on "Trade," and select "Pre-Trading." Or click "More" in the upper left corner and select "Pre-Trading."

2) Taking ABCD as an example, click "Go to Trade," and "Start Pre-Trading" to enter the token trading interface.

3) Pre-trading is limited to isolated margin mode, and users can freely modify the leverage multiple, with a maximum of 2X; other operational processes are similar to most trading processes, allowing users to set order modes, prices, costs, and other parameters based on personal preferences to go long or short.

Tool Innovation

From an industry perspective, OKX pre-trading demonstrates its strong technological innovation and ability to respond to user needs, bringing more trading modes and tools to the cryptocurrency market, which can attract more users and liquidity, and help the market discover and determine token prices in advance. This price discovery mechanism helps form market consensus before the tokens are officially listed, making market prices more transparent and stable, thus promoting industry progress.

From a user perspective, it allows users to hedge against price volatility risks before the official release of tokens, avoiding potential price volatility risks after listing, thus achieving more effective risk management. Additionally, it provides opportunities for early participation in new projects, enabling users to position themselves and engage with new projects earlier, breaking previous limitations.

From a project perspective, OKX pre-trading provides an additional liquidity channel for new tokens. Through settlement contracts, traders can buy and sell before the tokens are listed, increasing market activity and liquidity. For new projects, this allows them to gain market attention and funding support even before formal trading. Furthermore, new token projects can showcase their market demand and user interest before the official listing, which not only enhances the confidence of project parties but also boosts trust among potential users and the community, contributing to the project's success after listing.

However, any tool has dual aspects, and OKX pre-trading is no exception. While it provides opportunities, it also brings risks. Users need to conduct a comprehensive assessment before participating and should not act blindly. The new coin market is like a dazzling star in the cryptocurrency world, shining with infinite possibilities. The launch of the pre-trading feature by OKX better conveys this potential.

Disclaimer

This article is for reference only. It represents the author's views and does not reflect the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; (iii) financial, accounting, legal, or tax advice. We do not guarantee the accuracy, completeness, or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals regarding your specific circumstances. You are responsible for understanding and complying with applicable local laws and regulations.