FAQ

General

Who operates and stands behind Quedex?

The platform is operated by Quedex Limited, a Gibraltar-registered company. Get to know our company, its regulatory status and the management team at the about page.

What does it mean that Quedex is in live beta?

Although we are currently in the live beta phase, the platform is fully operational, bitcoin deposits and withdrawals are possible and full trading functionality is available. You can check it yourself by registering and starting to trade on Quedex!

Meanwhile, the user interface still may undergo constant changes as we improve the ease of trading at Quedex. As we are adding new features, downtime may be a bit more frequent as well. We are also looking for feedback - please let us know what are you looking for in a futures and options trading platform and write to us at support@quedex.net.

Is Quedex regulated?

Quedex operates under the laws of Gibraltar where blockchain regulations came into force starting 1st January 2018 and Quedex is covered by the transitional arrangements. For details see the about page.

Do you have an affiliate program?

Yes! If you like our platform and would like to recommend us further, have a look at our affiliate program. You will get a percentage share of trading commissions generated by those who you refer, while they will get a discount for all trading fees.

How do I learn trading on your platform?

We provide tutorial articles and videos to help you familiarize with our platform and learn new trading ideas. They are available in the Tutorials section.

What is the Session Passphrase you require?

This passphrase is used to encrypt your private PGP key which is used to communicate with the exchange engine. It's very secure because it never leaves you browser (it decrypts the key locally). To learn more visit security.

Trading

What order types are supported?

The orders you may submit are limit orders. A limit order has the following characteristics:

  • It's either a BUY or SELL order.
  • It has two parameters: quantity - the amount you want to buy or sell and price - the order will be executed at this price or better.
  • It does not expire, unless the instrument is no longer active.
  • It may be cancelled.

During continuous trading, the orders are matched with price then time priority. However, the orders are matched differently during the auction.

During auction, you may also sometimes see a market order in the order book. It does not have a price limit - it will be executed at any price available on the other side of the order book. Market orders are placed automatically by the liquidation engine to liquidate a position.

Are there any fees?

No, you can trade for free until the end of January 2018! Also, there are no fees for depositing bitcoins and no withdrawal fees (except Bitcoin network fees).

As the free trading period will come to an end, you will be able to find more details on our fee structure on our Fees page.

How does the session schedule look like?

Every day, the exchange transitions between the following trading states:

  1. Closing Auction 7:55 - 8:00 UTC
  2. No trading 8:00 - 8:15 UTC
  3. Opening Auction 8:15 - 8:20 UTC
  4. Continuous Trading 8:20 - 7:55 UTC on the next day

How are the QDX Spot, Settlement indices calculated?

We calculate average BTCUSD exchange rate from multiple exchanges. The exact description is available in the documentation of settlement.

Does Quedex contract market makers?

Yes, we are contracting external entities to provide liquidity on our platform. If you'd like to become a market maker on Quedex please contact us - we are happy to discuss conditions.

How are options quoted? If I see a price of 0.00000800 BTC what does it mean?

The BTC price is the option premium per one option contract (having notional value of $1). To learn more please visit our Option Quotations Guide and Option Valuation Guide.

Deposits & Withdrawals

How can I deposit?

Only Bitcoin deposits are accepted.

You may deposit BTC to an address assigned to your account. Deposits go straight to our Cold Wallet, but are booked immediately (1 min. max.) after reaching 3 confirmations and are available for trading.

How can I withdraw? When will I receive the funds?

You may withdraw to the address of your choice via our web app when logged in. The amount has to be at least 0.01 BTC. Submitted withdrawal requests await manual verification and signing in our Cold Wallet. The funds requested for withdrawal are locked and not available for trading.

Withdrawals are processed at least once a day after 08:00 UTC, and are subject to both automated and manual checks. You will receive your funds after the withdrawal transaction is broadcast to the BTC network after signing in our Cold Wallet (you will receive email notification).

Risk Management

When and how are positions liquidated?

The positions are liquidated if your Balance (after adding unsettled profits or losses and deducing pending withdrawals, order margin and order fees) of that account falls below minimum maintenance margin requirement. If your balance (adjusted as before) falls below initial margin level, you will get a margin call, i.e. you will be notified to deposit more funds or close your positions.

During liquidations, all pending orders are cancelled. If that doesn't bring free balance above zero, all open positions are closed with market orders. If these orders would cause significant price jumps, auction is triggered.

Do I have any guarantees about securing my PnL?

Yes. During continuous trading, all profits are added directly to the trader's balance and are immediately available for withdrawal and trading, thus allowing for greater leverage. This also means that all profits from continuous trading are guaranteed (are not subject to socialisation of losses).

When do socialised losses come into play?

Systemic losses can occur if the trader's orders are liquidated at a price resulting in a negative balance (after including profits or losses accrued during auction), which can only occur at the end of the auction and can affect only the profits gained during auction. Our innovative multi-tier risk management system ensures that socialization of those systemic losses is rare and not severe:

  1. First tier - swift liquidation via market orders
  2. Second tier - balancing auction, which garners volume necessary to handle large liquidations
  3. Third tier - insurance fund to cover any resulting systemic losses that could arise during auction
  4. Fourth and final tier - socialization of remaining losses, which comes into play only when former three tiers are passed.

What is auction?

The auction is an additional market model (next to continuous trading, popular on other platforms), which focuses on maximizing traded volume and on price stability. This is a time-tested solution (applied by e.g. London Stock Exchange, Eurex, Tokyo Securities Exchange, Osaka Derivatives Exchange, etc.) that allows to obtain robust settlement price and to prevent cascading margin calls or market manipulations.

During the Auction, orders are accepted, put in the order book, but not immediately matched - instead, all matching occurs at the end of the auction.

The algorithm works as follows:

  1. For each price, the potentially traded volume is calculated. Trade volume is the lesser value of the two: cumulative buy volume and cumulative sell volume, for a given price.
  2. The price maximizing traded volume is selected as the Theoretical Auction Price.
  3. If the price is not unique, a price with the minimum absolute difference between cumulative buy volume and cumulative sell volume is selected. If the price is still not unique, a price closest to the last price is selected.

After 5 minutes, the auction ends and the last Theoretical Auction Price is set as the Auction Price, and orders are matched at that price. All orders with a price better than the Auction Price will be matched in full, orders exactly at the Auction Price will be matched according to time priority.

When (and why) is the balancing auction triggered?

Auction is triggered when a liquidation order thrown on the market would cause a significant price move. This means that volatile market moves that aren't caused by liquidation and smooth liquidations will never trigger an auction.

The auction prevents uncontrolled (i.e. not caused by the underlying market) price moves that may result from liquidations, market manipulation, &. Furthermore, the auction serves as a circuit breaker for cascading liquidations - it gives market time to garner sufficient liquidity to absorb the shock.

What if there is a sudden market move of 20% and the auction gets triggered? Will I be able to protect myself from further losses?

First, if the price would drop smoothly (no cascading margin calls), then no auction would happen and all positions could be closed easily during continuous trading. The parameters of the auction triggering are tuned in such a way not to impede normal market conditions.

Second, the exchange uses liquidations - and auction if these are very rapid - to limit the systemic losses, just as individual traders may want to jump out of their losing positions.

For the exchange, it is better to trigger the auction in that case, in comparison to allowing the price to crash (or squeeze). It is preferrable to cut losses swiftly, in particular when auction enables enough volume to pick the liquidation orders, than to keep the positions open when they cannot be liquidated without systemic loss.

The situation (and interests) of the exchange and individual traders is the same. The auction is beneficial to the exchange itself as a form of stop loss, and the more so for a single trader who hopes to get out at the best price! In addition, it is obviously in the interest of traders not to have any profit clawbacks or forced liquidations.

Of course, it takes more time to get out of the position when auction occurs in comparison to continuous trading. However, any alternative socialized losses system does not allow to get out of the position until final settlement (or rebalance)! If the exchange keeps the positions opened when these cannot be liquidated at positive balance, you have to wait much, much longer - until the contract has settled or has been rebalanced. Until then, your profits can always be eaten by a clawback.

Will the auction help me get out of a multi-leg position consisting of multiple futures and options?

Yes! It is much easier to close multi-leg futures and options positions when market is being balanced.

  • Single options contracts are closely related to one another, and options as a whole are connected with futures markets.
  • Even if the liquidation or stop loss was almost immediate, each leg (each single contract) would put pressure to other connected instruments, and the final price for the whole position would be much worse.
  • The balancing auction allows to disperse that pressure evenly on each leg simultaneously, and to gather necessary supply from the opposite side of the order book.

As a side note, commonly employed liquidation systems that use limit orders (instead of market orders and auction) are very ill-suited to managing risk of complex options positions.

  • These alternative systems can easily lead to situation where only a part of a multi-leg option position gets liquidated, the other getting stuck in the orderbook and waiting for socialization of losses. This will likely lead to an increase of the overall position exposure to the market, as multi-leg options positions may carry less risk than each leg separately. In consequence, systemic losses will be greater in comparison to no liquidation at all!
  • They could be easily manipulated. An attacker can manipulate the price of a less liquid leg, forcing liquidation of the whole position. With auction in place, the attacker will be unable to sufficiently manipulate the illiquid option or will not be able to benefit from the manipulation, as others could pick up liquidations.

Our auction system is immune to these threats.