How long does it take for CoinEx contracts to settle?

CoinEx contracts settle twice daily for most contracts, except for those with predefined expiration dates, where settlement occurs on the specified date.

Nov 30, 2024 at 05:44 pm

How Long Does it Take for CoinEx Contracts to Settle?

Understanding Contract Settlement

Contract settlement refers to the process of finalizing a futures contract, when the buyer and seller exchange the underlying asset and cash. Settlement concludes the contract, marking the end of the trading period and the realization of profit or loss.

CoinEx Contract Settlement

CoinEx, a leading cryptocurrency exchange, offers a diverse range of futures contracts across various underlying assets, including cryptocurrencies and commodities. These contracts are settled based on the underlying index or spot price, depending on the specific contract type.

The settlement process on CoinEx involves the following steps:

1. Contract Expiration

CoinEx futures contracts have predefined expiration dates, which determine when the contracts expire and are ready for settlement. The expiration dates vary depending on the contract type and asset being traded. Traders should consult the contract specifications for the exact expiration date.

2. Calculation of Settlement Price

On the contract expiration date, CoinEx calculates the settlement price based on a standardized algorithm. For perpetual contracts, which have no set expiration date, CoinEx uses a dynamic settlement mechanism to ensure a fair and orderly closure.

For example:

• USDT-Margined Contracts: Settlement price = Mark price at the time of 04:00 (UTC) on the settlement date.
• Coin-Margined Contracts: Settlement price = Index price or Spot price at the time of 08:00 (UTC) on the settlement date (depending on the contract type).

3. Margin Closeout

After the settlement price is determined, CoinEx closes all open positions in the expiring contract. Traders' positions are automatically liquidated based on the settlement price.

• Long Positions: The exchange forcefully sells the underlying asset to close the position.
• Short Positions: The exchange forcefully buys the underlying asset to close the position.

4. Settlement Distribution

Following margin closeout, CoinEx distributes the settlement funds to the respective traders' accounts.

• Settlement Profit: If a trader has a profitable position, they receive the settlement amount in their account.
• Settlement Loss: If a trader has a losing position, the exchange deducts the settlement amount from their account.

5. Contract Removal

Once the settlement process is completed, CoinEx removes the expired contract from its trading platform, and trading is discontinued. Traders can no longer hold or trade positions in the expired contract. However, the settlement process may take up to an hour to complete.

Conclusion

The time it takes for CoinEx contracts to settle depends on the specific contract type and asset being traded. While settlement for many contracts occurs twice daily, others follow their defined expiration dates. Traders should carefully review the contract specifications and be aware of the settlement schedule, ensuring they manage their positions accordingly.