Prediction contract products are an innovative type of financial derivative that has a settlement date. Regardless of the profit generated by the contract, it will be settled at the agreed-upon price on the designated trading date if the contract expires and is not closed out.
Prediction contract products involve trading contracts based on the predicted outcome of future events, typically settling on the date the results of those events are announced.
These prediction contract products are quoted and settled in USDT as forward contracts. The face value and trading unit of each contract are fixed.
In theory, without considering fees and spreads, the price of a prediction contract product should equal the probability of the underlying future event occurring.
1. Trading rules for event prediction contracts
Event prediction contract products are forward contracts quoted and settled in USDT, using USDT as a margin for opening positions. Trading rules adhere to XT.COM's contract product trading guidelines, with profits and losses calculated in USDT.
- Single event prediction contracts
Single event prediction contracts are based on the odds of a single event's future outcome. For example, a prediction contract for team XXX winning the English Premier League is based on whether the team will ultimately win the league in the current season. If the team wins the league, the contract will be settled at 1 USDT; if the team does not win, the contract will be settled at 0 USDT.
- Perpetual event prediction contracts
Perpetual event prediction contracts are based on the odds of a specific underlying future outcome in a series of continuous events. For example, prediction contracts for the outcome of each match in the league for team XXX. In this case, we offer three contracts for this underlying team, such as XXX_Win, XXX_Draw, and XXX_Lose, representing the win, draw, or loss outcomes for each match of the team in the league. If the team wins a certain match, the "XXX_Win" contract will be settled at 1 USDT, while the "XXX_Draw'' and "XXX_Lose" contracts will be settled at 0 USDT.
2. Buying price for event prediction contracts
The buying price of event prediction contracts is derived from the external market odds for the event/underlying, calculated as 1 / odds. For example, if the odds of team XXX winning the championship are 2:1, the buying price would be 1 / 2 = 0.5 USDT. It should be noted that the price of prediction contracts changes with fluctuations in external market odds.
3. Prediction contract settlement
Holding quantity * (settlement price - average buying price)
For example, if the buying price is 0.5 USDT and the quantity is 100 USDT, and team XXX ultimately wins the league championship, the settlement would be 100 * (1 - 0.5) = 50 USDT
4. Prediction contract fees
The fee rate for prediction contract products is charged according to the regular contract fee rate on the XT platform. The fee rate for participating in prediction contracts is 0.5%, the settlement fee is one taker fee, and the forced liquidation fee is 1%.
- XT.COM will not entertain disputes regarding the operation and settlement mechanisms of prediction contract products. If disputes arise, your account may be suspended from trading;
- XT.COM reserves the right to increase the margin ratio for prediction contract products near the settlement date;
- XT.COM reserves the right to the final interpretation of the above products.