Understanding Futures Delivery and Option Strike Pricing Mechanisms
When coin-margined delivery futures, USDT-margined delivery futures, or coin-based options contracts reach expiration, the platform calculates the final settlement price using a weighted average of the index price during the last hour before expiration. This becomes:
- Delivery price for futures contracts
- Strike price for options contracts
The platform then executes cash settlements for all contract holders, transferring any profits or losses directly to user accounts. Any unfilled orders are automatically canceled, and all positions are settled at this calculated price.
👉 Master advanced contract trading strategies to optimize your settlement outcomes.
Key Operational Details:
- Negative Balance Protection: In extreme market conditions, accounts may temporarily show negative balances post-settlement due to excessive losses. These are covered by the platform's risk reserve fund.
- Regional Considerations: Note that some products mentioned may not be available in all jurisdictions.
Lesson 4: Decoding Latest Price vs. Index Price vs. Mark Price
Trading interfaces display three critical pricing metrics with distinct functions:
- Latest Transaction Price: Real-time execution price from the order book.
- Index Price: Weighted average from multiple major exchanges, serving as the benchmark for contract settlements.
- Mark Price: Used for liquidation calculations to prevent market manipulation.
👉 Essential trading terminology explained for sharper decision-making.
Technical Analysis: Identifying Market Tops with Head-and-Shoulders Pattern
Pattern Structure:
Resembling a human silhouette, this reversal pattern forms after an uptrend with:
- Left shoulder (initial peak)
- Higher head (main peak)
- Right shoulder (lower peak)
Trading Implication:
A confirmed breakdown below the "neckline" signals potential trend reversal—a critical exit point for long positions.
Strategy Deep Dive: Spot Martingale System
Core Principles:
- High Win-Rate Approach: Doubles position size after losses to recover deficits upon eventual wins.
- Historical Roots: Originated in 18th-century France as a gambling strategy.
Critical Considerations:
- Requires substantial capital reserves to sustain consecutive losses.
- Best suited for mean-reverting markets with clear ranges.
Optimizing Network Stability Through DNS Configuration
Step-by-Step Guide for Windows/Mac:
Windows 10/8.1:
- Navigate to Control Panel > Network and Internet > Network Sharing Center
- Select "Change adapter settings" > Modify IPv4 DNS entries
MacOS:
- System Preferences > Network > Advanced > DNS tab
Recommended DNS providers: Cloudflare (1.1.1.1) or Google (8.8.8.8).
Arbitrage Order Strategies Explained
Why Arbitrage Matters:
- Corrects price deviations during irrational market movements
- Provides low-risk profit opportunities through statistical mispricings
Execution Methods:
Simultaneous buy/sell orders across correlated instruments when spreads exceed historical norms.
Crypto Options 101: Risk-Managed Derivatives
Unique Advantages:
- Controlled Risk: Limited to premium paid (buyer perspective)
Flexible Strategies:
- Straddles (profit from volatility)
- Covered calls (income generation)
Ideal For: Traders seeking leverage without liquidation risks.
Frequently Asked Questions
Q: How often are delivery prices recalculated during the final hour?
A: The platform uses continuous weighted averaging, not discrete snapshots.
Q: Can negative balances persist after risk reserve coverage?
A: No—the fund fully neutralizes negative equity post-settlement.
Q: What's the minimum capital for Martingale strategies?
A: Depends on asset volatility, but typically 10x expected drawdown.
Q: Do arbitrage opportunities exist in efficient markets?
A: Rarely—most appear during liquidity crises or technical disruptions.
Q: How do options provide "automatic" stop-loss?
A: Buying puts/caps defines maximum loss at trade entry.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Crypto trading involves substantial risk—consult qualified professionals before acting. © 2025 OKX. Licensed redistribution requires attribution.