Index Prices
1. Overview?
Index price aims to measure the price of an underlying asset.
OKX’s USDT-margined contracts are denominated in USDT index price, USDC-margined contracts are denominated in USDC index price, while coin-margined contracts use the USD-equivalent index price of the underlying asset.
To ensure the index prices accurately reflect each instrument’s fair price, they are ordinarily calculated as weighted averages of prices taken from price sources(s). The average mechanism is designed to ensure that the index remains representative, effectively mitigating the influence of anomalous price deviations originating from a single price source.
2. Calculating the index price
A. For each index price, retrieve the corresponding trading pair’s price from the designated price sources in real-time. The frequency of data retrieval is subject to the API rate limits set by these price sources. B. price sources that underwent system maintenance or didn’t update their latest price during a specified time period won’t be taken into calculation for the latest price updates. The update frequency is different for each index. C. If not all price sources are offering valid data, then data taken from each price source will be ordinarily weighted as follows.*
When data from 3 or more price sources are available, they will be weighted by their pre-set weighted values. If an price source’s price deviates beyond a defined threshhold from the median price of the rest of the price sources, that source of price will be adjusted toward the median accordindly. .
When data from 2 price sources are available, they will be weighted equally.
When data from only 1 price source is available, it will be taken as the index price.
OKX introduces various measures at its sole discretion to control systematic risks. Such measures include adjustments, additions, deletions and/or substitution of constituent price source(s) to avoid market disruption usually caused by substantial deviation of such index constituent(s) in a highly volatile market. As such measures may affect the price, position, and margin ratio of a user's order, there could be an increased risk of users being liquidated. Users should closely monitor the index price and their margin levels and take precautionary measures, including reducing their positions and topping up the margin against potential liquidation risk in their accounts. OKX will not be liable for any compensation or other legal liabilities for the loss or damage caused by the risk-control measures.
For certain perpetual contracts whose index incorporates external market data, OKX may activate index price bands restricting the extent to which the index price can deviate from the last available reference market price during periods when those markets are closed. The applicable band parameter may be adjusted by OKX at its sole discretion without prior notice. For details, refer to: Price protection mechanism (www.okx.com/en-sg/help/okx-to-activate-the-price-protection-mechanism-for-the-rwa-token-index); Stock Perpetuals FAQ (www.okx.com/en-sg/help/stock-perpetuals-faq); Commodity Perpetuals (www.okx.com/en-sg/help/commodity-perpetuals).
OKX may, at its sole discretion, refrain from disclosing certain constituent pricing sources, weighting information, or index prices on public-facing surfaces, due to licensing, legal, regulatory, or other commercial considerations.
3. Calculating the index price
Users should keep in mind that the index price will be affected by all of the factors that may at the time affect prices in the relevant markets for the constituent price source(s) of the index. Such factors include, among other things, applicable laws, political and socioeconomic events, regulations and trading rules, the marketmaking and order processing systems of those markets, the liquidity and efficiency of those markets, and the prices and price behavior of futures contracts on that index or a related index. For indices that incorporate external market data, additional factors include events specific to those reference markets, including scheduled or unscheduled market closures, pricing transitions within those markets, and regulatory or policy changes affecting those markets.