A new trading instrument appeared on the UTEX exchange in addition to crypto currencies and cash-settled futures for shares of non-public companies — physically-delivered futures for crypto assets. The Flow token was used as the underlying asset for the first deliverable futures contract, which is already traded on UTEX.
Upon expiration of the cash-settled futures contract, only the cash settlement occurs between the seller and buyer without any transactions of the underlying asset. In case of a physically-delivered futures transaction, the seller delivers the underlying asset itself to the buyer at the transaction price.
Deliverable futures on the UTEX exchange allow the seller to fix the price of the underlying asset, whereas the buyer can make money on the temporal risk that the seller tries to avoid. At the moment the short positions are available only to the market maker. We will inform you as soon as they are available to all users.
Trading conditions and expiration
Before the expiration, UTEX users can freely trade their futures, at a price determined only by supply and demand on part of the bidders.
The expiration of deliverable futures occurs gradually, according to the schedule, which is published before the trading begins.
At the time of expiration, some or all of the positions are closed for futures holders', and in return, the equivalent amount of the underlying asset is accrued to their UTEX account.
The initial volume of futures for sale is provided by the market maker that has a sufficient amount of the underlying asset at its disposal (the UTEX administration checks the market maker's balance sheets). Before the expiration, the market maker holds crypto currencies in the lock-up period.
Opening a short position is only available to a market maker. We will also inform you about the possibility to open short positions for all users.
During futures' trading on the UTEX exchange, an additional volume of futures may be released if there is a bidder conforming to the requirements (including in terms of ownership of the underlying asset).
In the course of trading, the holder of the underlying asset may not deliver the underlying asset at the time of futures' expiration for reasons our exchange has no control of. This and other risks associated with futures' trading are on the users. We recommend that delivery futures are traded by experienced users only.
Flow token futures
Today, the first physically-delivered futures — the Flow token — began trading on UTEX. The advantage for UTEX users is that due to the lock-up period, the initial sales price of the Flow token futures is less than the price of the token itself on the spot market.
Flow is a blockchain developed by the Dapper Labs company, which released the legendary CryptoKitties game. By launching its own project, Dapper Labs wants to create a scalable network for decentralized applications that use collectibles in the form of NFT tokens. Today, several major applications are already running on Flow: the game CryptoKitties, the marketplace NBA Top Shot and others.
One of the main products of the company is Playground, which helps developers issue their original crypto currencies and NFT tokens, as well as build marketplaces on the Flow blockchain. Check the official website for more details.
The expiration of the Flow futures will be split into 13 stages taking place from November 2021 to November 2022. The trading continues as usual between the stages. During the expiration a certain portion of open contracts is executed, in return futures' holders get the corresponding amount of Flow tokens into their UTEX accounts. A detailed expiration schedule is provided on the UTEX website.