What time does the OKX contract settle?

Understanding contract settlement on OKX at 8:00 UTC for futures and specific expiration times for options is critical for successful trading, risk minimization, and maximizing returns.

Nov 11, 2024 at 11:50 pm

What Time Does the OKX Contract Settle?

Navigating the complexities of contract settlement is crucial for successful trading on any exchange, and OKX is no exception. Understanding the nuances of settlement timing empowers traders to make informed decisions, minimize risks, and maximize their trading returns.

1. Types of Contract Settlement on OKX

OKX offers a diverse range of contract types, each with its unique settlement time:

• USDT-margined Futures Contracts: Settle daily at 8:00 UTC.
• Coin-margined Futures Contracts: Settle daily at 8:00 UTC.
• Options Contracts: Expire at specific times as defined in each contract's specifications.

2. Settlement Process for Futures Contracts

Futures contracts on OKX undergo a daily settlement process at 8:00 UTC:

• Mark Price Calculation: At the settlement time, the system calculates the Mark Price, which represents the fair value of the underlying asset.
• Settlement Price Calculation: The Settlement Price is then derived from the Mark Price, incorporating funding rates and other relevant factors.
• Unrealized PnL Realization: Open positions are closed at the Settlement Price, and any unrealized profit or loss (PnL) is realized.
• Cash Settlement: The realized PnL is credited or debited to traders' accounts in the relevant settlement currency (USDT or the underlying coin).

3. Settlement Process for Options Contracts

Options contracts on OKX expire at specific times indicated in their contract specifications:

• European Options: Expire at a fixed time on the expiration date.
• American Options: Can be exercised at any time up to and including the expiration date.

At the time of expiration, the following actions occur:

• In-the-Money Options: Exercised automatically if they have a positive intrinsic value.
• Out-of-the-Money Options: Expire worthless.
• Premiums: The premiums paid for purchased options are either credited or debited from traders' accounts.

4. Considerations for Contract Settlement

Traders should take the following considerations into account when approaching contract settlement:

• Time Zone Differences: Settlements occur at 8:00 UTC, which may not align with traders' local time zones.
• Market Volatility: High market volatility can impact the Settlement Price, leading to significant PnL fluctuations.
• Open Positions: Open positions are automatically closed at the Settlement Price, so traders must monitor their positions closely.
• Funding Rates: Funding rates can affect the Settlement Price and should be factored into trading strategies.

5. Managing Risk During Contract Settlement

To mitigate risks associated with contract settlement, traders can employ the following strategies:

• Understanding Contract Specifications: Familiarize yourself with the settlement times and other contract parameters.
• Monitoring Market Conditions: Stay informed about market volatility and price trends to anticipate price movements during settlement.
• Managing Position Sizes: Trade positions that align with your risk tolerance and account size to avoid excessive losses.
• Using Stop-Loss Orders: Implement stop-loss orders to limit potential losses in case of unfavorable price movements.