Event Contracts FAQ

What Are Event Contracts?

Event contracts are a derivative product launched by OKX. Each contract is defined using natural language to describe a specific event, and user payouts are determined by the final outcome of that event. Each event contract pair represents a contract with a potential payout of 1 USDT.

Users simply assess the likely outcome and select a direction, then purchase contract shares in the corresponding direction. The current price of the contract reflects the market’s collective judgment of the probability of the event occurring. At expiry:

• Correct judgment: Each contract share can be redeemed for up to 1 USDT (minus a settlement fee)

• Incorrect judgment: The share becomes worthless; no settlement fee is charged

Example: A user purchases 1 Up contract for 0.01 USDT. At settlement, if the Up direction is confirmed, the contract is worth 1 USDT.

Core Features

• Clear profit and loss: Results are determined based on final facts, with transparent rules.

• Full margin, no liquidation risk: No leverage, no margin calls. Maximum loss equals the amount paid at purchase; forced liquidation does not occur.

• Close positions at any time before expiry: During the contract’s life, users can sell their shares on the order book at any time to lock in gains or cut losses — no need to hold until expiry.

• Price equals probability, peer-to-peer trading: Buyers and sellers are matched through a unified order book. Prices are determined by market supply and demand with no platform price intervention. For example, an Up quote of 0.5 USDT indicates the market assigns approximately 50% probability to the event occurring.

Events and Markets

What is the difference between an “event” and a “market” in event contracts?

• Event: A defined question representing a specific subject, which may contain one or more markets.

• Market: The smallest tradeable unit. Each market corresponds to a specific question within an event and generates two types of shares: Up and Down.

What are the basic elements of an event contract?

How to Trade Event Contracts

How do I buy event contracts?

Select a direction (Up or Down) in the order book, enter a price and quantity, and submit the order:

• Buy Up: Determine the event will occur; purchase Up shares at the current price

• Buy Down: Determine the event will not occur; purchase Down shares at the current price

Upon purchase, an equivalent amount of USDT will be frozen as margin (see the Margin section for details).

How do I close my position early before expiry?

Before the settlement result is announced, you can sell your shares on the order book at any time:

• If the price moves favorably, sell early to lock in gains

• If the price moves unfavorably, sell early to cut losses

Example (BTC price event, early close):

A user buys 100 Up shares at 0.40 USDT, spending 40.00 USDT. The Up share price subsequently rises to 0.72 USDT, and the user sells all shares:

Realized PnL ≈ (0.72 − 0.40) × 100 ≈ +32.00 USDT

Note: actual amount received is net of fees.

What happens if I hold to expiry without closing early?

At expiry, the contract is automatically settled — no manual action required:

• Correct judgment: Each share is redeemed for 1 USDT, minus a settlement fee

• Incorrect judgment: Shares become worthless; no settlement fee is charged

Example (BTC price event, held to settlement):

A user buys 100 Up shares at 0.40 USDT. At expiry, the settlement price exceeds the target price and Up wins:

Settlement proceeds = 100 × 1.00 = 100.00 USDT (before fee deduction)

Realized PnL ≈ +60.00 USDT (before fee deduction)

If Down wins, the shares become worthless.

Settlement Rules

What is the settlement process for event contracts?

Every event has explicit rules defining the underlying asset, data source, settlement time, and how edge cases are handled. Please refer to the specific event’s rule description before trading.

The settlement process is as follows:

1. Contract expires; trading is halted

2. The system collects OKX index price data within a specified time window

3. The average index price within the time window is calculated as the settlement price

4. The settlement price is compared to the event’s target price to determine the winning direction

5. Winning share holders’ accounts are automatically credited 1.00 USDT per share (minus settlement fee)

6. Losing shares are zeroed out

7. The contract is automatically delisted

After settlement, PnL is automatically applied to the account and all positions are closed.

Example:

A user holds 500 Up shares for the event “Will BTC be above 85,000 USDT before 16:00?” At 16:00, the OKX index price = 85,312 USDT (above 85,000 USDT):

• Settlement result: Up wins

• Auto-credited to account (before fee deduction): 500 × 1.00 = 500.00 USDT

How does the platform handle disputed results?

If there is a dispute over the settlement result, the platform will handle it through a review process. Triggering a review may delay settlement. For specific rules, please refer to How to Trade Event Contracts and Settlement Logic

Trading Mechanics

What does the price of an event contract represent?

Each share is priced between 0.01 – 0.99 USDT, directly reflecting the market’s collective assessment of the probability that the event will occur:

What is order book liquidity sharing?

Up and Down orders are automatically mapped to the opposite side of the order book using the formula (1 − price), sharing liquidity:

Up Ask 0.66 → auto-mapped to Down Bid 0.34 (= 1 − 0.66)
Down Ask 0.38 → auto-mapped to Up Bid 0.62 (= 1 − 0.38)

This means a sell order placed on the Up side simultaneously provides buy-side liquidity for the Down side, significantly deepening market liquidity.

Example: A user places a sell order for 200 Up shares at 0.70 USDT. Another user can directly buy Down shares at 0.30 USDT without waiting for a separate Down sell order.

What order types are supported for event contracts?

(1) Limit Order

Users specify a price to place an order, which enters the order book and waits for a counterparty. The order price must be a multiple of 0.01 USDT; otherwise the order will be rejected.

• Supports placing orders by contract quantity

• If the order price can be matched immediately against the current order book, it is filled immediately (Taker)

• If it cannot be matched immediately, it rests in the order book and waits (Maker)

(2) Market Order

No price is specified; the order is filled immediately at the best available price in the current order book. Suitable for users who want to enter or exit positions quickly. The platform applies a worst-price protection mechanism to prevent excessive slippage on large orders.

• Market buy orders are denominated in amount only

• Market sell orders are denominated in contract quantity only

Note: large market orders may significantly impact prices. Always check order book depth before placing large trades.

For other order types, please refer to: Basic Order Types

Cancellation rules: You may cancel an order at any time before it is fully filled. For partially filled orders, only the unfilled remainder can be cancelled; the filled portion cannot be reversed.

What is the difference between Buy/Sell Mode and Open/Close Mode?

Event contracts support both Open/Close Mode and Buy/Sell Mode:

• Open/Close Mode: Within the same market, users can simultaneously hold both Up and Down contracts, each requiring full margin. For example, holding 5 Up and 6 Down contracts simultaneously requires separate margin for each: margin for 5 Up contracts + margin for 6 Down contracts.

• Buy/Sell Mode: Within the same market, users can only hold a one-sided position (Up or Down). For example, if a user already holds 5 Up contracts and buys 6 Down contracts, upon execution the system nets the positions — resulting in a final position of 1 Down contract — and releases the margin for the original 5 Up contracts. Buy/Sell Mode improves capital efficiency.

Margin

How is margin calculated for event contracts?

Event contracts use a full margin system:

Margin required = Number of shares × Purchase price + fees
Maximum loss = Margin used (total USDT paid at purchase)
Maximum gain = (1.00 − Purchase price) × Number of shares − fees

Note: event contract positions cannot be liquidated and do not participate in account-level liquidation processes. However, if the overall account risk is triggered in cross-margin mode, unfilled event contract orders may be cancelled to safeguard overall account health.

Example (buying Up):

Buy 500 Up shares at 0.60 USDT:

• Margin frozen ≈ 500 × 0.60 + fee ≈ 300.xx USDT

• Maximum loss (if Down wins) ≈ 300.xx USDT

• Maximum gain (if Up wins) ≈ 500 × 0.40 − settlement fee ≈ 199.xx USDT

Example (buying Down):

Buy 500 Down shares at 0.40 USDT:

• Margin frozen ≈ 500 × 0.40 + fee ≈ 200.xx USDT

• Maximum loss (if Up wins) ≈ 200.xx USDT

• Maximum gain (if Down wins) ≈ 500 × 0.60 − settlement fee ≈ 299.xx USDT

Positions & PnL

Position Value

Current position value = Number of shares held × Current market price

Note: this value (including floating PnL) cannot be used as margin.

(Example:)( A user holds 200 BTC Up shares; current market price = 0.75 USDT:)

(Current position value = 200 × 0.75 = 150.00 USDT)

PnL Calculations
(1) Held to expiry and settled:

• Winning side: each share redeemed at 1.00 USDT, minus settlement fee

• Losing side: shares become worthless; no settlement fee

(2) Early closing before expiry:

Realized PnL = (Average sell price − Average buy price) × Quantity sold − sell fee

(3) Floating PnL (floating during holding period):

Floating PnL = (Current mid-market price − Average buy price) × Shares held

Fees

How are fees calculated for event contracts?

Trading Fees

• Taker fee = K1 × C × (P × (1 − P))²

• Maker fee = K2 × C × (P × (1 − P))²

Settlement Fee

• Winning side: Use the Taker formula with P = 0.01 to calculate the settlement fee (approximately 0.01%)

• Losing side: No settlement fee is charged