Prices

The Omni-Trading Hub leverages liquidity and real-time trading data from centralized exchanges to provide a transparent, reliable, and efficient trading experience. Understanding the pricing structure is essential for users to optimize their trading strategies. Below is a comprehensive overview of the various pricing mechanisms on the platform, highlighting their sources and roles in the trading process.

Index Price

The index price is a weighted average of spot prices across multiple centralized exchanges. It offers a fair market value of an asset, reducing the impact of price manipulation or volatility from a single exchange.

• Purpose: In perpetual and futures contracts, the index price serves as the benchmark price for calculating mark prices and settlement prices.

• Features: By aggregating prices from various sources, the index price is more stable and impartial, making it suitable for markets with high frequency and volatility.

Mark Price

The mark price combines the index price with the funding rate to ensure it reflects a fair market price, reducing the risk of volatility caused by market manipulation. It is crucial for calculating the unrealized profit and loss (PnL) of open contracts, preventing unnecessary liquidations caused by short-term price fluctuations.

• Purpose: Used to determine the unrealized PnL of open contracts, protecting traders from unnecessary forced liquidations.

• Features: The mark price offers protection to high-leverage traders, ensuring they are not prematurely liquidated during market volatility.

Bid and Ask Price

The bid price is the highest price at which the market is willing to buy an asset, while the ask price is the lowest price at which the market is willing to sell. The difference between them is called the spread, which directly reflects market liquidity and trading costs.

• Purpose: Bid and ask prices are used to generate the order book, helping users understand the buying and selling forces in the market and influencing trading costs and price discovery.

• Features: A narrower spread indicates better market liquidity and lower trading costs.

Liquidation Price

The liquidation price is the price at which a trader’s position is automatically liquidated when their margin falls below the maintenance margin requirement. It is closely tied to the trader’s leverage level and market volatility, designed to protect the exchange and other participants from excessive risk.

• Purpose: In high-leverage trading, liquidation price ensures timely closure of positions to prevent further losses, maintaining market health.

• Features: The liquidation price adjusts dynamically with market conditions to ensure account health is preserved.

Open, High, Low, Close (OHLC) Prices

OHLC prices reflect key points of price movement in the market and help traders analyze trends and identify trading opportunities.

• Purpose: These prices are used for technical analysis, helping to identify market trends and price ranges to develop trading strategies.

• Features: OHLC prices reflect market price changes over a specified period, commonly used to determine market direction and volatility.