We think that our responsibility to provide a fair and orderly trading environment should be inclusive of user protections for so-called ‘fat finger’ input errors. Though rare, these types of mistakes have the potential to create sudden drastic price movements that disadvantage other users.
With this in mind, we will be introducing the Fat Finger Protection Trading Rule on 16 February 2021 at 08:00 UTC.
By guarding against input errors, the rule not only protects the trader placing the order but also other users from sudden price shocks.
The rule applies to both Market and Limit orders.
Protection on Market Orders
Market orders will be restricted by the maximum Impact Price of:
- Buy orders: 5% above Best Ask or Mark Price (whichever is higher)
- Sell orders: 5% below Best Bid or Mark Price (whichever is lower)
If a market order size is less than or equal to the accumulated size of orders available in the order book (up to the maximum Impact Price), the requested order will be fully filled.
However, should the order size be larger than the accumulated size of orders available, the order will only trade up to the maximum Impact Price, and the remainder of the order will be cancelled.
Protection on Limit Orders
Users will have their limit order rejected should an order meet the below criteria:
- Buy orders: Limit price is more than 5% above Best Ask or Mark Price (whichever is higher) and order size is larger than the current Best Ask size.
- Sell orders: Limit price is more than 5% below Best Bid or Mark Price (whichever is lower) and order size is larger than current Best Bid size.
We believe that the benefits of the rule will be felt by all users, and only a very small proportion of total requests will be affected.
We are committed to continuously improving our platform rules and value feedback from the BitMEX community. For any questions or feedback, please contact Support. Happy trading!
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