Unfortunately for the trader behind the contract, the price of bitcoin fell such that the exchange attempted to liquidate the position.
The size of the contract appears to have made this impossible and, having only partially liquidated the trade, the exchange is now facing the prospect of a $420 million unfilled position.
The lower $BTCUSD goes, the more OKEX will have to clawback from traders this friday (to settle the huge liquidation at $8050)
this is PRE their expected announcement however. Any new information they give will be updated here.
— loomd'rat (@loomdart) August 1, 2018
If the price of bitcoin remains at its current level of 1 bitcoin to $7570, something that is unlikely to happen, OKEx’s systems will suffer a loss of 950 BTC ($7.20 million).
Fortunately for OKEx, the exchange operator does not provide the funds its traders use to Leverage their futures contracts. Unlike FX brokers, who often internalize their trades, the positions that OKEx’s traders take enable them to provide one another with leverage and Liquidity .
For example, if a trader in long bitcoin loses money, the traders that have taken a short position will be the ones making money from the loss. Conversely, if short traders lose money, long traders will make money from their positions.
Clawing back traders money
In this instance, however, the sum involved is so large it seems unlikely OKEx’s short traders will be able to cover their losses. As the firm operates a socialized trading model, it will also be up to its clients to cover for the loss.
Why, you ask, will they have to pay for someone else’s mistake? OKEx operates a ‘clawback’ model. This means that, when the margin balance of a trader reaches zero, the exchange will make a concurrent limit order at the going exchange rate.
If that order is unfilled at the time of settlement, which is 16:00 Hong Kong time on Fridays for OKEx, profitable traders will have to cover the costs. In this instance, that will be traders with short contracts.
OKEx does have an insurance fund that is supposed to cover losses such as the above. The only problem is that the fund only contains 10 BTC ($75,700) - leaving another 940 BTC for OKEx's traders to make up.
A spokesman for the firm, Lennix Lai, released a statement on Wednesday acknowledging that the firm expects serious clawback measures.
As a result of this, OKEx’s traders look set to foot a bill of approximately 940 BTC ($7,115,800). Given the temperamental nature of the cryptocurrency market, this could change for the better or worse.
At any rate, things are not looking bright for those with short USD/BTC contracts at OKEx. Fingers crossed fellas.
Unfortunately for the trader behind the contract, the price of bitcoin fell such that the exchange attempted to liquidate the position.
The size of the contract appears to have made this impossible and, having only partially liquidated the trade, the exchange is now facing the prospect of a $420 million unfilled position.
The lower $BTCUSD goes, the more OKEX will have to clawback from traders this friday (to settle the huge liquidation at $8050)
this is PRE their expected announcement however. Any new information they give will be updated here.
— loomd'rat (@loomdart) August 1, 2018
If the price of bitcoin remains at its current level of 1 bitcoin to $7570, something that is unlikely to happen, OKEx’s systems will suffer a loss of 950 BTC ($7.20 million).
Fortunately for OKEx, the exchange operator does not provide the funds its traders use to Leverage their futures contracts. Unlike FX brokers, who often internalize their trades, the positions that OKEx’s traders take enable them to provide one another with leverage and Liquidity .
For example, if a trader in long bitcoin loses money, the traders that have taken a short position will be the ones making money from the loss. Conversely, if short traders lose money, long traders will make money from their positions.
Clawing back traders money
In this instance, however, the sum involved is so large it seems unlikely OKEx’s short traders will be able to cover their losses. As the firm operates a socialized trading model, it will also be up to its clients to cover for the loss.
Why, you ask, will they have to pay for someone else’s mistake? OKEx operates a ‘clawback’ model. This means that, when the margin balance of a trader reaches zero, the exchange will make a concurrent limit order at the going exchange rate.
If that order is unfilled at the time of settlement, which is 16:00 Hong Kong time on Fridays for OKEx, profitable traders will have to cover the costs. In this instance, that will be traders with short contracts.
OKEx does have an insurance fund that is supposed to cover losses such as the above. The only problem is that the fund only contains 10 BTC ($75,700) - leaving another 940 BTC for OKEx's traders to make up.
A spokesman for the firm, Lennix Lai, released a statement on Wednesday acknowledging that the firm expects serious clawback measures.
As a result of this, OKEx’s traders look set to foot a bill of approximately 940 BTC ($7,115,800). Given the temperamental nature of the cryptocurrency market, this could change for the better or worse.
At any rate, things are not looking bright for those with short USD/BTC contracts at OKEx. Fingers crossed fellas.
Thailand Restricts Introducing Brokers to Only Promote Digital Token Services, Not Cryptos
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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