OKX provides users with unique market opportunities through its innovative pre-trading feature.
Bitcoin and Ethereum initially dominated the cryptocurrency market, but with the rapid iteration and maturation of the industry, an increasing number of emerging projects have begun to surface. The new coin market is a significant component of the cryptocurrency domain, playing a crucial role in the industry’s innovation and development.
The changes in the total market capitalization share of the new coin market reflect advancements in innovative technologies and the expansion of application scenarios, driving the evolution of the cryptocurrency landscape. Its substantial market penetration potential enhances 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 propelling the development of the new coin market. As of July 2024, the total market capitalization share of the new coin market is approximately 30%, highlighting its important position within the overall market.
In response to active users’ enthusiasm for participating in the new coin market, OKX has officially launched the pre-trading feature, allowing users to engage in contract trading for tokens that have yet to be listed. This aims to provide a secure and reliable platform for users to participate in the price discovery of new tokens and lead innovation in trading tools within the industry. Users can experience this feature immediately by upgrading the OKX APP to version 6.7* or above.
**Table of Contents**
– About Pre-Trading
– Core Elements Interpretation
– Dual Nature: Highlights and Risks
– Usage Instructions
– Tool Innovation
The essence of OKX’s pre-trading contract is a USDT-based contract that typically settles before a new coin is listed on the coin-to-coin trading market. Through OKX pre-trading, users can transact before the official listing of the coin, allowing them to buy and sell digital asset contracts ahead of the platform’s listing, all while enjoying 2x leverage.
Generally, during the pre-trading phase, users can profit from price fluctuations by going long or short. During the contract settlement phase, OKX’s pre-trading contracts will settle at a specific price on the settlement date. However, during the coin listing phase, there is no guarantee that the coin will ultimately be listed on the spot market.
From an industry development perspective, engaging in contract trading for tokens that have not yet been listed not only provides effective price discovery and liquidity enhancement mechanisms but also offers better risk management tools and market participation opportunities for users and project parties.
It is worth noting that the mechanisms of the OKX pre-trading market differ from those of the standard settlement market. Among these, the index price uses the latest transaction price of the OKX pre-trading contract as the index price, which is also used to determine the contract’s settlement price.
A common concern among users is whether OKX’s pre-trading will affect the subsequent prices of listed coins on OKX. In fact, the prices in the OKX pre-trading market are determined by the market behaviors of buyers and sellers, which may not accurately reflect the actual issuance price of the new coins. While pre-trading can reflect market expectations, the listing price of the coin itself may be influenced by various factors, and the two are not directly correlated.
**OKX Pre-Trading**
– **Contract Elements**
– **Details Example**
– **Underlying**: XXX/USDT index (the index takes the latest transaction price of the contract)
– **Settlement Currency**: USDT
– **Face Value**: 1 XXX
– **Price Quotation**: Quoted based on the USDT price of 1 XXX
– **Minimum Tick Size**: 0.0001
– **Leverage**: 0.01 to 2 times
– **Trading Hours**: 24/7
– **Contract Type**: Settlement Contract
– **Settlement Time**: The settlement date of the contract has yet to be determined and will be announced separately once confirmed
Additionally, the table below summarizes the core elements of OKX’s pre-trading settlement contracts. The following sections will interpret several of these elements, such as settlement time and prices.
1. **Settlement Time**:
– If the new coin is issued normally and confirmed to be listed on OKX’s coin-to-coin market, the pre-trading settlement contract will settle before the coin is listed on the spot market. The specific settlement date will be announced separately, and once confirmed, it will be displayed in the settlement date section of the trading page.
– If the project party cancels the new coin issuance or does not announce the issuance plan within six months, or due to other risk control issues, the platform decides not to list it on OKX’s coin-to-coin market, OKX may delist the contract early. The specific settlement date will be announced separately, and once confirmed, it will be displayed in the settlement date section of the trading page.
– For API users: The expTime field related to trading products (instruments) will return 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.
2. **Leverage**: The current leverage supported by OKX pre-trading is from 0.01 to 2 times, with a maximum of 2 times.
3. **Tiered Position Limit Rules**: The maximum open position amount for users corresponds to the maximum position amount for the selected leverage 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.
**Tiered Position Limit Rules**
– **User Level**
– **Maximum Open Position Amount (USD)**
– **Maintenance Margin Rate**
– **Initial Margin Rate**
– **Maximum Leverage**
– Level 1: 5,000 USD, 10%, 50.00%, 2
– Level 2: 10,000 USD, 12%, 50.00%, 2
– Level 3: 15,000 USD, 13%, 100.00%, 1
– Level 4: 20,000 USD, 14%, 100.00%, 1
– Level 5: 30,000 USD, 15%, 100.00%, 1
– Level 6: 40,000 USD, 16%, 100.00%, 1
– Level 7: 50,000 USD, 17%, 100.00%, 1
– Level 8: 60,000 USD, 18%, 100.00%, 1
– Level 9: 70,000 USD, 19%, 100.00%, 1
– Level 10: 80,000 USD, 20%, 100.00%, 1
– Level 11: 90,000 USD, 21%, 100.00%, 1
– Level 12: 100,000 USD, 22%, 100.00%, 1
Note that the maximum open position amount in the above tiered levels is in USD and needs to be converted into specific contract sizes based on the coin price and face value:
Contract size = USD value / coin price / contract face value / contract multiplier (specific size values refer to the coin listing announcement).
4. **Position Limit Rules**: For contracts in pre-trading, users can open positions that meet the tiered position limit rules while also complying with individual position limits. For U-based contract designated market maker (DMM) users, the position limit is 100,000 USD; for non-U-based contract DMM users, the position limit is 10,000 USD.
**Position Limit Rules**
– **User Type**
– **Position Limit Size (USD)**
– **Position Limit Size (Contract Size)**
– U-based contract DMM users: 100,000 USD; Contract size = USD value / coin price / contract face value / contract multiplier (specific values refer to the coin listing announcement).
– Non-U-based contract DMM users: 10,000 USD.
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 value expectations of the token before its official listing, the activity and market response of pre-trading can enhance community confidence in the token project, validating market demand and project potential through actual trading data, thereby increasing price discovery opportunities and trading transparency.
Additionally, locking in prices before the official token listing allows users to hedge against price volatility risks through contract trading, thereby avoiding uncertainties brought by market fluctuations. Users can also explore more trading strategy options and flexibly adjust their trading portfolios based on market conditions. 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 a better trading experience, trading pre-settlement contracts carries high risks, as the pre-trading market is more susceptible to reduced liquidity and higher price volatility, exposing users to greater liquidation risks. Not all coins traded in pre-settlement contracts will ultimately be listed on OKX.
Currently, OKX reserves the right to independently decide to adjust the listing, extend, or terminate contracts as well as the contract settlement date.
It is important to note that pre-settlement contracts have a fixed expiration date, which is linked to the listing of the relevant underlying token. At expiration, only USDT will be settled; therefore, users are not trading the underlying token and should not expect to receive the underlying token upon contract expiration. Furthermore, since trading occurs before the related coin is listed, there is no clearly identifiable price source for the underlying token, meaning that the contract price may differ from the price of the underlying token at and after its listing. OKX may decide at any time to suspend or terminate such pre-settlement contract trading.
**How to Use OKX Pre-Trading?**
Open the OKX App, click “Trade,” and select “Pre-Trading.” Alternatively, click “More” in the upper left corner and select “Pre-Trading.”
Using ABCD as an example, after clicking “Go to Trade,” “Start Pre-Trading” leads to the coin trading interface. Pre-trading is limited to isolated margin mode, allowing users to modify the leverage freely, with a maximum of 2X. Other operational processes are similar to most trading processes; users can set order types, prices, costs, and other parameters to go long or short based on their preferences.
From an industry perspective, OKX pre-trading showcases its strong technological innovation and responsiveness to user needs, bringing more trading models and tools to the cryptocurrency market. This can attract more users and liquidity, helping the market to discover and determine token prices in advance. This price discovery mechanism aids in forming market consensus before the tokens officially launch, making market prices more transparent and stable, thus promoting industry advancement.
From a user perspective, pre-trading allows users to hedge against price volatility risks before the official token release, mitigating potential price fluctuation risks after listing, thereby achieving more effective risk management. Additionally, it provides the opportunity to participate in new projects earlier, breaking previous limitations.
From a project perspective, OKX pre-trading offers an additional liquidity channel for new tokens. Through contract trading, traders can buy and sell operations before the token is listed, increasing market activity and liquidity. For new projects, this means gaining market attention and capital support before official trading begins. Moreover, new token projects can demonstrate their market demand and user interest before the official listing, which not only bolsters the confidence of the project team but also enhances trust among potential users and the community, aiding the project’s success post-listing.
However, like any tool, OKX pre-trading has its duality, providing opportunities while also introducing risks. Users should conduct comprehensive evaluations before participating and avoid blind involvement. The new coin market is like a brilliant star in the cryptocurrency world, shimmering with infinite possibilities. OKX’s launch of the pre-trading feature better conveys this potential.
**Disclaimer**
This article is for reference only. It represents the author’s viewpoint and does not reflect the stance 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 this 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.
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