Pre-Market Perpetual Futures ｜ Gate

Overview

Gate pre-market trading allows users to trade USDT-M perpetual futures that have not been listed. When these futures are listed on the relevant spot exchanges, they will convert to standard perpetual futures.

Pre-market trading has different product mechanisms from that of regular perpetual futures trading, and it has unique considerations. Please understand the product mechanisms and risks of pre-market trading beforehand.

Product Mechanisms

1. Price Mechanism

1.1 Pre-market futures trading uses the same dual-price mechanism as regular futures trading if the coin price is available as the index price.
Index Price: Pre-Market spot price
Mark Price: Median (Price 1, Price 2, Last Fill Price)

• Price 1 = Index Price × (1 + Funding Basis Rate)
  Funding Basis Rate = Funding Rate × (Time Remaining Until Next Funding Settlement / Funding Settlement Interval)
• Price 2 = Index Price + 5-Minute Moving Average
  5-Minute Moving Average = Moving Average [(Buy 1 Price + Sell 1 Price) / 2 - Index Price]

1.2 If the coin price is not available as the index price, pre-market futures trading will use the index price calculation during extreme market conditions.
During extreme market conditions, Gate may not be able to get a reasonable spot price from any exchange, including its own platform. In such cases, the index price will be calculated based on the last fill price of perpetual futures to ensure it remains reasonable.

Formula
The index price is calculated using the target price recorded every second over the last 10 seconds.
The formula for calculating the index price at time Tn is as follows:
Index Price at Time Tn = α × Target Price at Time Tn + (1−α) × Index Price at Time T(n-1)
Here, the value of α is 0.1818, and the platform may adjust this value based on market conditions.

Target Price Calculation
The target price of a perpetual contract is calculated every second and can be divided into two scenarios:

1. No open orders:

• Target Price = Last Fill Price

2. There are open orders:

• Target Price = Adjusted Depth-Weighted Mid-Price

Adjusted Depth-Weighted Mid-Price Calculation
The calculation of the adjusted depth-weighted mid-price involves the following four steps:

Step A: Calculate the bottom trading volume of the premium index
The premium index bottom volume equals the Impact Margin Notional (IMN), which determines the average buy or sell price on the order book.

Step B: Calculate depth-weighted buy and sell prices
If the premium index bottom volume is 400 USDT, the depth-weighted buy or sell price can be calculated using this value along with the data from the order book.
The logic behind the calculation is as follows:
Taking the depth-weighted sell price as an example, depth D is derived from the premium index bottom volume of 400 USDT from Step A.
(Sell 1 Price × Amount at Sell 1 + ...... + Sell i Price × Amount at Sell i (P1)) ≤ D < (Sell 1 Price × Amount at Sell 1 + ...... + Sell i Price × Amount at Sell i (P2)). P1 indicates the sell amount at the price ‘Sell i’ at a specific market depth, referred to as depth D.
Thus, the depth-weighted sell price for a premium index bottom volume of 400 USDT is calculated as:
Depth-Weighted Sell Price = (Sell 1 Price × Amount at Sell 1 + ...... + Sell i Price × Amount at Sell i (P1)) / (Amount at Sell 1 + Amount at Sell 2 + ...... + Amount at Sell i (P1))
The calculation for the depth-weighted buy price follows the same logic.

Step C: Ensure the reasonableness of the depth-weighted mid-price
To avoid a large deviation between the depth-weighted mid-price and the buy or sell prices, an offset adjustment is applied to the depth-weighted price calculated in Step B. This adjustment helps maintain price stability.

• Adjusted Depth-Weighted Buy Price = Max (Buy 1 Price × 0.98, Depth-Weighted Buy Price)
• Adjusted Depth-Weighted Sell Price = Min (Sell 1 Price × 1.02, Depth-Weighted Sell Price)

Step D: Calculate the adjusted depth-weighted mid-price
To minimize volatility and maintain price stability, the adjusted depth-weighted mid-price is calculated as follows:
Adjusted Depth-Weighted Mid-Price = (Adjusted Depth-Weighted Buy Price + Adjusted Depth-Weighted Sell Price) / 2
After determining the target price, it can be inserted into the formula above to calculate the current index price.

1.3 The pre-market futures trading market will automatically transition to the regular perpetual futures market when the coin price is available as the index price during extreme market conditions.
Price smooth transition plan:
During extreme market conditions, the index price (A) and the index price (B) obtained from other exchanges will gradually transition over 120 seconds, as detailed below:
The 120 seconds will be split into 120 cycles, with each cycle calculated as: P_i = (120 - i) / 120 × A_i + i / 120 × B_i (i=1,2, ......, 120)
Once the smooth transition is complete, the index price will fully shift from P_i to the index price from other exchanges. Additionally, the mark price calculation will adopt the same method used for perpetual futures.

2. Limit Price Rules

Lowest Buy Price = Mark Price x (1-15%)
Highest Sell Price = Mark Price x (1-15%)

3. Funding Rate

Pre-market perpetual futures will use the same formula as regular perpetual futures to calculate the funding rate with a 4-hour settlement cycle. Funding rates may vary based on market movements. For more details, please refer to: https://www.gate.com/help/futures/futures-logic/27569/funding-rate-and-funding-fee

4. Trading Fees

Trading fees are the same as standard perpetual futures. For more details, please refer to: https://www.gate.com/fee

5. Position Limit and Tiered Margins

Please note that the unit for the maximum open position of the risk limit is in USD, with the market's highest limit being 50,000 USD.

6. Liquidation Mode

The liquidation mode for pre-market perpetual futures is consistent with regular perpetual futures. For more details, please refer to: https://www.gate.com/help/futures/futures-logic/22159/liquidation-process

7. Risks

Due to the high-risk nature of pre-market trading, markets in pre-market are more prone to low liquidity, high volatility and increased liquidation risk. Therefore, compared to perpetual futures, these markets face a higher risk of auto-deleveraging (ADL).

1. If a new token is issued normally and confirmed to be listed on Gate, it will convert to a regular perpetual contract, and parameters such as risk limits will be adjusted with separate notice.
2. If the new token cannot be listed on Gate due to project cancellation or other risk control issues, the contract may be delisted in advance. The exact date of delisting will be notified in the form of an announcement.

Gate reserves the final right to interpret the product.

Disclaimer

The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
For more information about potential risks, please refer to Gate's Risk Disclosure and User Agreement.