Rulebook

Version 0.941, preliminary, 22.02.2014 * Changelog

Basic rules

1. Main

1.1.

1.2.

1.3. Fees

1.3.1.

1.3.2. Fees may be subject to volume, promotional or other discounts at our discretion. If some discount is applied, then actual fee amount will be displayed in the trading window. Currently available volume discounts are published at https://icbit.se/discount, those discounts are subject to change without prior notice.

1.4. Chat service is provided only for informal communication between users and it's not always monitored by icbit staff. Please, use only e-mail messaging for anything serious like bug reports, official questions, requests and so on.

2. Funds

2.1. Bitcoins are deposited to your balance when your transaction gets 6 confirmations. Under some circumstances we can allow less strict confirmation requirments, but you should be ready to wait for 6 confirmations.

2.2 There are no fees for depositing or withdrawing bitcoins. 

2.3 At this moment there is no way to add funds in any other currency than bitcoins.

3. Futures trading.

3.0 You are trading with other users, not the trading platform, when buying or selling futures, so all your possible profit comes from your counterparty's losses, and in some rare cases may be limited by their accounts balance. Usually the margin system protects all traders.

3.1 Positions

3.1.1 Opening a position: "Buy" contracts if you want to open a positive ("long") position or "Sell" contracts if you want to open a negative ("short") position. Your position for any given instrument can be either positive or negative, but not both at the same time. A specific amount of your funds will be temorarily locked on your balance while your position is open; this amount is called "initial margin", and is calculated according to section 3.3

3.1.2 Profit/loss: your profit/loss is calculated by a "variation margin" (VM) formula, provided at each instrument specification page. By using this formula you can estimate how much you will earn if you open your position at "PriceOpen" and close at "PriceClose". "Unrealized profit/loss" is calculated with same formula by using average trading price for last hour (1h VWAP) as "PriceClose". Your profit/loss becomes realized (accounted to your balance) when you close your position (either entirely or partially) or at the settlement, when all positions of this instrument are closed.

3.1.3 Closing a position: if you want to close your positive ("long") postion then you need to sell your contracts, and if you want to close your negative ("short") position then you need to buy equal number of contracts. All positions of given instrument are automatically closed during it's settlement, so you may just wait for that moment instead of closing manually. See instrument specification pages for time and date of it's settlement.

3.2 Clearing

3.2.1 Price range for next session is calculated at the moment of clearing, according to contract specifications, based on the clearing price. Clearing should not be mistaken for Settlement [3.4]

3.2.2 Clearing of all contracts happens twice daily, at 08:00 and 20:00 UTC/GMT.

3.2.3 Price used for clearing is calculated as average trading price for the last hour preceeding the clearing. Average between best bid and best ask is used if there are no trades during this period. This price is limited by the trading range. If there are no bids or asks then top or bottom of the range will be used as clearing price.

3.3 Margin

3.3.1 Initial margin required to open a contract is calculated as Base margin + Additional margin. Base margin is set to a specific amount per one contract, so that your position is safe within any movements inside this contract's allowed range in one trading session (between clearings). Additional margin takes in account the risk of contango/backwardation and makes sure that your position is safe if the futures contract price gets back to the settlement price. Margin requirements may be different for "long" and "short" (positive and negative) positions: additional margin will be enabled for long positions in contango situation or short positions in case of backwardation.

3.3.1.1 Base margin is calculated as VM(Rl, Rh), where VM(PriceOpen, PriceClose) is the Variation Margin formula as per contract specification, Rl is the bottom and Rh is top price of the trading range.

3.3.1.2 Additional margin is calculated as VM(Ps, Rl) or VM(Ph, Ps), whichever is positive. Ps is the "spot" price, according to given contract settlement price calculation method for this moment.

3.3.2 Your margin level is displayed as colored percentage value in the "Margin %" column of "Balances" widget. Your position is considered safe if this number is positive (greater than zero), so try to keep it that way by depositing funds to your account as needed if you are losing and still want to keep the position until the trend will change direction. Positive "Margin %" level means that you have enough to keep your position during any price movements in the allowed range between clearings.

3.3.2.1 "Margin %" is calculated as (Net_Value - Maintenance) / Net_Value * 100%, where Net_Value is account balance + unrealized profit/loss and Maintenance is 75% of the Initial Margin for all open positions.

3.3.3 You are responsible for monitoring your balance and margin. We may issue a e-mail warning or SMS message, but we can't guarantee it's delivery and can't check it's status, so it would be not our fault if some part of or your entire position is closed due to insufficient margin. We have to process margin calls as soon as possible since we can't force losing party to pay.

3.3.4 If your "Margin %" becomes 0 then a "margin call" may be issued, automatically selling or buying contracts from you as suitable to reduce your position back into safe zone. Those orders are automatically placed to be executed in current session range and work just like any other orders.

3.3.5 If "margin call" situation happens, but the orderbook contains no suitable orders to reduce position of losing trader then "force closing" may be performed. In such case equal number of contracts will be closed in both losing and winning party positions at such price that all possible funds are transferred from losing trader to winning party without resulting in negative account balances. This kind of "trade" won't affect Last price or anything depending on trade prices.

3.4 Settlement

3.4.1

3.4.2

3.4.3

4. Options trading

5. Exchange operations

6.

7. Accounts and security.

 

7.1. Your e-mail address is the main key to recover a "lost" account. We may decline account recovery requests if you don't have access to your e-mail and you don't have configured your phone number in account settings.

7.2 E-mail confirmation may be requested to confirm any changes of your bitcoin address for payments.


Changelog

+ 22.02.2014: + 1.4 : Added.
+ 03.01.2014 : + 3.1 : Added.
* 03.01.2014 : * 3.2.1 : UPL will not become realized at clearings.
+ 09.12.2013 : + 1.3.2 : Added.
* 09.12.2013 : * 3.3.2 : Added clarification "(greater than zero)"
* 02.12.2013 : * 3.3.1.1 : Added clarification "VM(PriceOpen, PriceClose)", * 3.3.1.1 : fixed arguments order.
* 28.11.2013: * 3.2.1 : Possible "±50% range limitation" removed since this risk is now covered by additional margin.
* 11.11.2013: * 3.2.1, + 3.2.3 : Clearing price is now 1-hour average instead of "last price".
> 06.11.2013: Version 0.9, preliminary, published