Options Price Limit Mechanism

To prevent the malicious manipulation of the market, Huobi Futures limits the opening and closing price of options contracts for each token.

Options buyers (buy call or put options) should follow the platform’s highest limit price while the options sellers have to follow the platform’s lowest limit price. The calculation methods are as below:

  • Price limit rule for call options:

The highest buy price = min {Options mark price + Maximum increase, Index price}

The lowest sell price=max {Options mark price – Maximum decrease, Minimum tick}

Maximum increase= max {Options index price*M, min [(2*Options index price – Strike price), Options index price] *N}

Maximum decrease= Options index price*K

  • Price limit rule for put options:

The highest buy price = min {Options mark price + Maximum increase, Strike price}

The lowest sell price=max {Options mark price – Maximum decrease, Minimum tick}

Maximum increase = max {Strike price*M, min [(2*Strike price - Options index price), Options index price] *N}

Maximum decrease= Options index price*K

Among which,M=0.5%,N=10%,K=10%

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 [The above data and indicators may be adjusted in real time according to market conditions, and adjustments will be made without further notice]

Both opening positions and closing positions are limited by price limit mechanism. If users buy to open or buy to close positions, hard price limit will be triggered when the type price is higher than the highest buy price in the market; if users sell to open or sell to close positions, hard price limit will be triggered when the type price is lower than the lowest sell price.

 

 

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