Trading Rules

This document, the Trading Rules, sets forth conduct and policy practices for the operation of the LXDX Exchange.

LXDX is a centralized exchange for the matching and settlement of digital assets and currency pairs.

1. Products

LXDX makes best efforts to ensure that the products made available to its Traders are both vetted by our product review process and fall within region specific compliance requirements. Traders, due to our commitment to follow all applicable regulatory guidelines, may be offered varying sets of products to trade.


LXDX offers highly volatile products tied to the performance highly volatile underlying assets. Users are advised to exercise caution and ensure they fully understand the risks of the products available for trade.

2. Matching

LXDX operates centralized limit order book matching engines for each listed pair on the exchange.

Matching, unless otherwise specified, is based on the “first come first serve” principle, FIFO.

FIFO

Under FIFO, price and time are the only criteria for filling an order; all orders at the same price level are filled according to time priority such that the first order at a given price level is the first order matched.

In the following example, if orders on the offer side came in at or below 8012, the 9-lot and then the 2-lot would match (in that order).

Time
Bid Price
Bid Quantity
19:01
8012
9
19:09
8012
2

Performance

Each product’s matching engine can process millions of orders per second, typically thousands per connection process from a single Trader’s account. The matching engine is a small, but important, slice of the total execution time of an order.

Redundancy

In the very unlikely event of a matching engine failure, the product transitions to an auto-halt and recovery phase. More details are found in our reliability documents.

3. Orders

Order Types

3.1 LXDX supports the following order types: Limit, Market, and Stop.

  • 3.1.1 Limit Order
    • 3.1.1.A A Limit Order is an Order to buy or sell a specified quantity of an Asset at a specified price.
    • 3.1.1.B Limit Orders will never fill at a worse price than the specified Price.
  • 3.1.2 Market Order
    • 3.1.2.A A Market Order is an Order to buy or sell a specified quantity of an Asset for the best available price given the existing orders in that Pair’s Order Book.
    • 3.1.2.B There is an expected price indicated to the Trader in his Front End; there is no guarantee that the Order will Fill at the forecast price.
    • 3.1.2.C Market Orders often fill against multiple price levels and can potentially lead to unexpectedly bad fill prices; Market Orders should be used cautiously, particularly in less liquid Pairs.
    • 3.1.2.D Market Orders interact with FIFO matching in no preferential way to Limit Orders.
  • 3.1.3 Stop Order
    • 3.1.3.A A Stop Order is an Order that converts to one of the previous two Order types Order when a condition is triggered; the Stop condition is when the last Trade Price of the Asset equals or surpasses the Stop Price.
    • 3.1.3.B Stop Orders are active but not in the Order Book until their condition is triggered and the triggered Order is generated
    • 3.1.3.C Stop Orders are never visible to any market participants until their trigger condition is met.

Order Qualifiers (Time in Force)

3.2 BitBridge supports the following Order Qualifiers: Good Till Cancel (GTC) , Good Till Day (GTD) , and Immediate or Cancel (IOC) 

  • 3.2.1 Good Till Cancel (GTC)
    • 3.2.1.A A Good Till Cancel Order will remain on the Order Book until explicitly cancelled by the Trader. This is the default Qualifier.
    • 3.2.1.B A GTC Order can be optionally specified to Post Only; A Post Only GTC will only join the Order Book if it would not be immediately Filled.
  • 3.2.2 Good Till Day (GTD)
    • 3.2.2.A A Good Till Day Order will remain on the Order Book until either cancelled by the Trader or when the daily Session ends.
    • 3.2.2.B A GTD Order can also be specified to Post Only; A Post Only GTD will only join the Order Book if it would not be immediately Filled.
  • 3.2.3 Immediate or Cancel (IOC)
    • 3.2.3.A An Immediate or Cancel Order will attempt to match instantaneously against the Order Book; any remaining quantity not immediately Filled is Cancelled.
    • 3.2.3.B All IOC orders are Taker Orders.
    • 3.2.3.C When trading synthetic pairs, all orders are Immediate or Cancel Orders.

3.3 Market Orders are always Immediate or Cancel.
3.4 Orders made in Synthetic Pairs are always Immediate or Cancel.

Maker vs Taker Orders

Maker Orders are Orders that, when added to the Order Book, do not immediately cross. Any Order sent with Post Only enabled will either be accepted as a Maker Order or Rejected. Immediate or Cancel and Market Orders are always Taker Orders.

Placement

3.5 To place an Order, a Trader must have Sufficient Funds of the relevant Asset in their Account which is sufficient to cover both the total value of the Order and any all applicable fees.

  • 3.5.1 Typically, Orders where the Trader does not have Sufficient Funds are rejected by the Trader’s front end system. However, for market orders, the rejection occurs most frequently at the exchange’s Gateway.
  • 3.5.2 In Warrants, the Sufficient Funds requirement from from the Sell side are the maximum possible loss of the contract.

3.6 Upon placing an order, Funds are locked for the relevant Asset according to the quantity.

Cancellation

3.7 Traders may cancel orders at any time before the Order is Filled.

  • 3.7.1 Excess cancellation may lead to a violation of the exchange messaging policy
  • 3.7.2 IOC orders may not be cancelled. Repeated attempts to cancel IOC orders are flagged as a Market Abuse.

Clearing

3.8 A Trade (or Cross) occurs when a Maker Order is matched with a Taker Order, yielding one or multiple Fills. An Order may be matched with and Filled by one or more Orders at multiple prices.
3.9 Settlement of all Trades in Cash Products is immediate by crediting and debiting the relevant funds of Assets in both Traders’ Accounts.

4. Trade Adjustments

All Trades are Final

No trades on LXDX will be reversed with the following exceptions:

  • Due to a grievous system or technical error, Order matching does not occur as discussed in these Trading Rules. In this most extreme scenario, all trading across all symbols will halt, and LXDX will make a best attempt to restore users to their positions immediately prior to the error.
  • To be very clear, it is the Trader’s responsibility to ensure his manual or automated trading is aware of the price action of the instruments he or she is trading. There will be no busts or price adjustments.

5. Integrity

LXDX will take necessary steps to prohibit disruptive, deceptive or manipulative conduct on its platform.

Manipulation

5.1 Self-Trade Prevention: Orders which would self match are rejected. (Orders where the Traders acts as both the Buyer and Seller)

5.2 Wash trading facilitated through multiple accounts controlled by the same entity or group of entities is strictly prohibited. This conduct manipulates prices and goads unsuspecting participants into trading when they otherwise would not. LXDX does not participate in this behavior and aggressively monitors for accounts which frequently trade with one another. Accounts which are suspected of wash trading will be given warning and ultimately banned if the behavior continues.

5.3 Traders on LXDX may not engage in any actions that fall under the catch-all of market manipulation, these include:

  • 5.3.1 Quote Stuffing — Placing huge amounts of orders to attempt to degrade LXDX‘s systems to slow down or degrade Market Data
  • 5.3.2 Flipping — Placing large orders on one side of the market to goad participants to join the price level, and then sweeping the market the opposite direction
  • 5.3.3 Pumping — Coordinating with a syndicate of Traders to manipulate the price of an Asset
  • 5.3.4 Flickering — Placing and Canceling repeatedly to incite other Traders to act
  • 5.3.5 Price Manipulation — Any other actions designed specifically to artificially control or move the price of an Asset
  • 5.3.6 Money Passing — Pre-arranging transactions designed for the purpose of passing money between accounts.
  • 5.3.7 Accommodative Trades — Pre-arranging transactions for the purpose of assisting another person to engage in a transaction. These are sometimes referred to as 1-2-3-Trades; they are strictly prohibited.
  • 5.3.8 Intimidation — Engage in any conduct that threatens, harasses, coerces, or intimidates another market participant.
  • 5.3.9 Facilitation — Aid, enable, support, endorse, or finance any of the above

Disruption

5.4 Attempts to degrade or sabotage Market Data publication, KYC/AML verification, timely order processing, or any other LXDX system is strictly prohibited.

6. Accessibility

Hosting

LXDX hosts its Matching Engine, Gateways, Data Plane, and all other Core services inside the SG1 data center in Singapore or FR5 in Frankfurt. Each data center is connected to the cloud via AWS Direct Connect. Each data center features 10G connectivity with 1G fallback redundancy.

Connectivity Methods (Latency Notes)

8.1 All Traders connect to LXDX through the following interfaces: Native Binary (Native), FIX, Web API, and Web Interface.

  • 8.1.1 Native Binary provides significantly lower latencies than other connectivity methods.
    • 8.1.1.A Users must be co-located at our facility to connect via Native.
    • 8.1.1.B Each connection supports 500 orders per second.
    • 8.1.1.C Documentation on connecting via Native can be found here.
  • 8.1.2 FIX is provided largely as legacy support; we’re not running a highly optimized FIX engine. FIX documentation can be found here.
    • 8.1.2.A Users must be co-located at our facility to connect via FIX. LXDX does not support FIX-over-internet.
    • 8.1.2.B Whereas Native users own a connection on one of our Internal Gateways, FIX users route through our External Gateways. Messages incur both the translation cost to binary but also an extra hop.
  • 8.1.3 Web API Traders receive Market Data through Websockets and place orders via LXDX‘s REST API. REST API documentation is available here.
    • 8.1.3.A Web API orders are routed via the web through AWS to our data center; it is therefore recommended that latency sensitive users locate as close to our data center as possible.
  • 8.1.4 Web Interface Traders are typically less latency sensitive users.

Access and Interruptions

8.2 LXDX Market Operations has the authority to take necessary actions to protect market integrity. These include:

  • Halting of trading
  • Modification of Risk and Margin parameters
  • Restricting Trader access
  • Restricting the set of supported Order Types
  • Cancelling resting Orders
  • Any other action deemed necessary for the best interest of the Exchange and it’s users

8.3 LXDX will make all best efforts to limit intervention, will make best attempts to give advanced warning of any intervention, and will disclose a detailed report concerning any intervention within 24 hours of any such intervention.

  • 8.3.1 A list of all market interventions made by our staff will be made publicly available at address. No identifying user information will be ever displayed in the interventions data.
  • 8.3.2 Any user directly impacted by Market Operations will receive an email detailing the cause for intervention, the steps taken by Market Operations, and any steps necessary required for the User to get back to compliance with the Exchange Rules.

8.4 Retail Protection: If broad connectivity to LXDX via the Web Interface is unavailable for 10 minutes or longer, LXDX will move all affected products to Cancel-Only while the interruption lasts.

8.5 If a product has entered the Cancel-Only state due to an interruption, the product will only transition back to fully operational after the Web Interface has remained demonstrably operable for 10 minutes.

8.6 Notifications of Interruptions and the current product states are available at status.lxdx.co.