Margin Trade: Spot Index Calculation Rules
In our commitment to safeguarding our margin users' assets and preventing potential liquidation due to single-exchange price volatility, KuCoin has innovated a BTC-denominated Spot Index. This index, applicable to all crypto assets in margin markets, ensures market fairness.
For each cryptocurrency, we gather corresponding trading pairs from global exchanges with superior market depth to form the index constituents. If these pairs fail to meet our standards or if better market depth pairs emerge, we promptly update them.
On top of this, we also have a system in place to filter out any unusual price movements among these constituents. This ensures the index remains a reliable indicator of market fairness.
How the KuCoin Spot Index Calculation Works
How We Calculate the Spot Index
KuCoin diligently updates the latest quotes from all constituents every 5 seconds. For constituents that aren't BTC trading pairs, such as USDT pairs, we convert them to BTC using the most recent USDT/BTC mark price.
Calculating the index price depends on the number of prices we successfully retrieve:
i. If there are one or more pairs, the median is used for an even number of prices, while the average of the middle values is used if there is an odd number of prices.
ii. If we don't get any prices, the index price is considered as empty.
Note: The mark price of a crypto asset is derived from its spot index price.
How Mark Price is Calculated
If the spot index is available, the mark price is equal to the spot index price.
In cases where the spot index calculation fails (due to issues such as exchange quote failures or price anomalies), the mark price transitions to match the average filled order price on our platform. As soon as the spot index recovers, the mark price will again be adjusted to match the spot index price.
The mark price is also used to calculate the debt ratio for your margin account (which includes both the Cross and Isolated Margin Accounts). Your assets are totaled against your liabilities in your account, and the calculation is done according to each of their equivalent value in BTC.
For the most recent spot index used in KuCoin Margin Trading:
Web: From the Markets tab > Spot > Spot Index
App: Go to Markets > Spot > Spot Index