How does LBank close the contract?

LBank's comprehensive contract closure process ensures timely settlement, protects funds, and maintains market integrity by automatically closing contracts at expiry, calculating final settlement prices, issuing margin calls, distributing profits/losses, and providing post-closure support.

Nov 28, 2024 at 03:42 pm

How LBank Closes Contracts

LBank, a leading global cryptocurrency exchange, employs a comprehensive process to ensure the smooth and efficient closure of contracts traded on its platform. This process involves multiple steps aimed at safeguarding user funds and maintaining market integrity.

Step 1: Contract Expiry

Contracts on LBank have a predetermined expiry date, upon which they are automatically closed. The expiry date is clearly stated in the contract specifications and is visible to all traders before initiating a trade.

Step 2: Final Settlement Price Determination

At the time of contract expiry, LBank calculates the final settlement price based on the underlying asset's market value. This price is used to determine the profit or loss for each trader involved in the contract.

Step 3: Margin Call and Liquidation

If a trader's margin falls below the minimum maintenance margin requirement before contract expiry, LBank will issue a margin call. If the trader fails to meet the margin call by depositing additional funds, their position will be liquidated to cover the potential loss.

Step 4: Profit/Loss Calculation

Once the final settlement price is determined, LBank calculates the profit or loss for each trader based on the difference between the contract's opening price and the settlement price. Traders who correctly predicted the market movement will receive a profit, while those who made an incorrect prediction will incur a loss.

Step 5: Funds Distribution

After calculating the profit or loss, LBank distributes the funds to the respective traders' accounts. Profits are credited, and losses are deducted from the account balances.

Step 6: Contract Delisting

Upon contract expiry, LBank delists the contract from its trading platform. This prevents traders from placing new orders or holding open positions in the expired contract.

Step 7: Post-Closure Support

LBank provides post-closure support to traders who have questions or concerns regarding the contract closure process. Traders can contact LBank's customer support team for assistance.

Additional Considerations

• Market Volatility: Contract closure can be affected by market volatility, particularly during times of high price fluctuations. LBank advises traders to monitor market conditions and adjust their positions accordingly to minimize potential losses.
• Force Majeure Events: In the event of unforeseen обстоятельствах that prevent LBank from closing contracts as scheduled, the exchange may extend the contract expiry date or employ alternative settlement methods to protect user interests.