2.3.4 Quarterly Futures

What is a Quarterly Futures contract?

When entering into a Futures Contract, you agree to buy or sell the underlying asset at a pre-agreed upon price and specified date for delivery. At this date (every quarter) the contract will expire, irrespective of the price that the underlying asset is currently at. This is different from our Deliverable Perpetual Futures contracts where you get to choose the delivery date.

“Perpetuals Swaps” are contracts that can be physically settled 3 times everyday currently.

 

What is the difference between a physically delivered and cash settled Futures contract?

  • Physical settlement time: 12:00 UTC

  • Delivery time: 12:00 UTC (or shortly after)

  • Deadline to specify Physical Settlement: 11:00 UTC

In cash settled Futures contracts, the underlying asset is not exchanged directly but rather all open positions are delivered at a settlement price. This leads to one key risk – price manipulation at contract expiry. To counter this, our Quarterly Futures are physically delivered and so are not at risk of this occurring.

 

What happens at expiry in a CoinFLEX Futures contract?

CoinFLEX’s Futures contracts expire into the relevant Deliverable Perpetual Futures market, with buyers holding their position to expiry receiving the underlying asset (e.g. BTC) in that book. Similarly, sellers will secure the counter asset (e.g. USD) in the relevant contract.

“Quarterly contracts” are contracts that are roughly 3 months in length, and expire into Perpetuals.

If holders want to obtain their received asset in Spot, they are immediately able to do so using the “Lock for Delivery” feature of our Perps.

 

Specifications:

  • Naming convention: Last Friday of every quarter

    • e.g. BTC-USD-200626, BTC-USD-200925

  • Expiration:

    • Last Friday of every quarter

      • e.g. BTC-USD-200626-LIN contract expiration date is June 26, 2020, 12:00 UTC

    • Contracts convert into Perpetual

      • e.g. BTC-USD-200626-LIN position converts into BTC-USD-SWAP-LIN position

  • Listed: Friday 12:00 UTC, one week before expiration of the previous contract

    • e.g. BTC-USD-200925-LIN market is listed Friday June 19, 2020, 12:00 UTC

Our Futures work this way in order to maximise the benefit of having a Physically delivered contract, whilst not having the downside of margin ramp up near contract expiry – which every other Physically Delivered Futures contract in both crypto and the traditional space have done prior.

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