What are Market order and Limit Order Price Cap and Floor Ratio ?

To ensure fair and orderly trading, the platform sets price ceilings for buy-market orders and price floors for sell-market orders. This helps protect market orders from extreme market movements and abnormal trading activity.

For example, if the market is highly volatile, the contract's price may deviate from the mark price, causing buy/sell-market orders or limit orders to expire if the difference exceeds a predetermined threshold. If the market price of a contract is 10% higher or lower than its corresponding mark price, your order will expire.

In cases of extreme price movements or deviation from the price index, the platform will undertake additional protective measures, such as changing the threshold of order price cap. However, during illiquid and volatile market conditions, market orders may execute at an undesirable price due to significant price movements.

Market orders placed under these circumstances may expire or be partially filled due to the Market Order Price Cap/Floor Ratio, which is more prevalent in extremely illiquid market conditions. If the Market Order Price Cap/Floor Ratio exceeds the threshold, any unfilled market orders will expire.

While the Market Order Price Cap/Floor Ratios are set to balance trade certainty and minimized price risk, there is still a possibility that a trade may be delayed or may not take place. It is important to note that different contracts may have varying Market Order Price Cap/Floor Ratios, which may affect the speed and certainty of trades.