AOFEX Innovative Option Trading Agreement

Dear Investors,

AOFEX trading platform (hereinafter referred to as "the platform") provides innovative option trading services for digital financial derivatives (hereinafter referred to as "the platform") with certain risks. Therefore, users need to carefully read and agree to this agreement to open and use the innovative option trading services. Your behavior of use will be regarded as you have fully understand the risk of innovative option trading and agree this Agreement.

Foreword

This Agreement aims to reveal the investors about the investment risks of digital asset derivatives transaction and to help investors assess and determine their own capabilities. In view of the existence of investment risks, investors shall carefully read this Risk Reminder before confirming this Agreement and conducting the options Transactions, make sure to understand the nature and rules of the options Transactions, and decide whether to participate in the options Transactions on their own according to their own investment experience, objectives, financial status and risk-taking ability.

Investors shall consult the law and other independent professional advice before applying for highly risky options transactions.

Innovative Option Design Concept

1. Innovative option trading is a new kind of digital asset risk hedging financial derivatives, which is simple, flexible and easy to operation. It provides a new digital asset risk hedging product for investors.
2. Investors can make use of innovative option trading to carry out specific direction trading under limited and controllable risk exposure; on the premise of clear expected return, innovative option trading has the characteristics of trading diversity and potential income multiplicity; when buying innovative options, investors also know the possible amount of profitat the same time.
3. As we all know, digital assets are financial derivatives with extremely sharp price fluctuations. In the current market of risk hedging financial derivatives, such as contract futures, due to the restrictions of fairness, trading volume and time cost, they can not completely hedge the risks brought by the price fluctuations of digital assets.
4. Innovative option trading not only has the traditional financial market option trading nonlinear profit and loss structure of risk management and portfolio investment advantages, but also combines with the characteristics of digital assets to provide investors with professional risk management strategies in high-risk markets.

Innovative Option Trading Rules

Innovative options use the mark price generated by corresponding token price of five global well-known digital asset exchanges. The index composition and weight are as follows:

Exchange	Proportion	Unit
Binance	20%	USDT
Kraken	20%	USD
Okex	20%	USDT
Huobi	20%	USDT
Coinbase	20%	USD

 

The premise of mark price effective is: effective weight exchange ≥ 3, otherwise it will be regarded as invalid. The platform will modify the index composition and weight according to the real-time transaction data of the five major exchanges from time to time to ensure the validity and fairness of the data, and publish the adjustment announcement. Note: the platform will issue an adjustment announcement for any changes in the index composition and weight of the marked price in the innovative option trading.

Because the price accuracy of the five exchanges is not unified, the system has agreed on the price accuracy of option products. If the price accuracy of an exchange is inconsistent with the system agreement, the decimal rounding method is adopted. For example, the price precision of BTC options is 2 digits. If the price of an exchange is 9000.1234, the price involved in the effective calculation after processing is 9000.12.

2. Please refer to the following table for current risk hedging currency:

2. Current call and settlement token: innovative options add new tokencall and settlement functions, which can purchase options in any token among OT, AQ, USDT, BTC, ETH, EOS, LTC, XRP, BRC, or AP for settlement. The purchase and settlement are converted according to the real-time exchange rate.

For example, if AQ is used to purchase the long option of BTC, the purchased share will be calculated according to the AQ / BTC real-time exchange rate, and the settlement will be conducted with AQ at the time of delivery.

5. Current option cycle: 1 minute, 5 minutes, 15 minutes, 30 minutes and 1 hour options.

6. Return:

The expected return on options will be defined when investors purchase innovative options.

On the premise of determining the expected rate of return, users can hedge market risks on demand.

For example, if one unit of 5-minute BTC long option is purchased, the rate of return is 1.94. If the option delivery result is up, the yield is 1.94 unit BTC (including principal).

7. Delivery time: 0:00 GMT is taken as the beginning of the day option.

For example, 30 minute options start at 00:00:00, delivery at 00:30:00, and so on.

8. Purchase time: the purchase of 1minute option shall be stopped 10 seconds before the beginning of the current option, and the purchase of the remaining options shall be stopped 30 seconds before the beginning of the current option.

For example, if the start time of the current 1M option is 00:30:00 and the delivery time is 00:31:00, then the closing purchase time is 00:29:50; for the current 5M option, the starting time is 00:30:00, and the delivery time is 00:35:00, then the closing purchase time is 00:29:30; for the current 15M option, the starting time is 00:30:00, and the closing time is 00:29:30; the starting time of the current 30M option is 00:30:30 If the delivery time is 01:00:00, the closing time of purchase is 00:29:30; if the start time of 1D option in the current period is 01:00:00 and the delivery time is 02:00:00, then the closing time of purchase is 00:59:30.

 9. Exception handling: if data acquisition fails due to network delay or interruption, third-party exchange data abnormality, or data calculation error due to abnormal trading system and other reasons, the option transaction may not be completed. You understand and agree that the option transaction affected by the above situation will be deemed as invalid transaction and used to purchase the above option Will be returned to the user's trading account free of charge.

10. Amount limit: each tokenhas the limit of minimum purchase amount and maximum purchase amount. The specific amount limit is subject to the actual transaction page.

11. Delivery results: AOFEXexchange will implement the following criteria for innovative option trading delivery from 00:00 (GMT + 8) on May 28, 2020:

Delivery Period	Long	Short	Flat
1M	|Rise|＞0.005%	|Fall|＞0.005%	|Rate|≤0.005%
5M	|Rise|＞0.03%	|Fall|＞0.03%	|Rate|≤0.03%
15M	|Rise|＞0.04%	|Fall|＞0.04%	|Rate|≤0.04%
30M	|Rise|＞0.05%	|Fall|＞0.05%	|Rate|≤0.05%
1H	|Rise|＞0.06%	|Fall|＞0.06%	|Rate|≤0.06%

Now the optional types of innovative option trading are long, short and flat. After the adjustment of the criteria, the criteria of price fluctuation for different delivery periods will be different. Please refer to the above table.

Open long: the price of the token rises at the time of the delivery, and the absolute value of the increase exceeds the proportion shown in the table;

Open short: the price of the token falls at the time of delivery, and the absolute value of the decline exceeds the proportion shown in the table;

Flat: the absolute value of the price rise and fall of the token at the time of delivery is less than or equal to the proportion shown in the table.

Note: for call options before the implementation of the new standard, settlement shall still be carried out in accordance with the original rules.

Existing Risks

1. Risk of Price Fluctuation

As a special product with investment value, due to affected by many factors, the price of digital currency’s fluctuates greatly making it difficult for investors to comprehensively grasp in actual operation. Therefore, there is the possibility of investment mistakes. If the risk cannot be effectively controlled, the investors may suffer great losses, and shall assume all the losses caused by this on their own.

2.   Transaction Risk

(1) Investors need to understand that derivatives transaction has the characteristics of high risk, which may lead to rapid profits or losses. If the direction of the transaction is opposite to the fluctuation of the market, it may cause a large loss. According to the amount of the loss, investors need to add digital currency margin or reduce positions, otherwise the positions taken by them may be forced to liquidate, and investors shall assume all the losses caused by this.

(2) In options transaction system, once it clinches a deal of the limit order submitted, that is irrevocable, and the investor shall accept the risks that may cause by this way.

(3) The Exchange shall not guarantee investors' profits and shall not share profits or risks with investors.

3. Risks of Policy Supervision

The derivatives transaction of digital asset may face policy regulatory risks in certain jurisdictions. Investors need to make a careful judgment on the premise of understanding the policy regulatory background of the transaction region in advance.

4. Other Possible Risks

(1) When the users invest high value, it may bring greater risks to the users to maintain the market stability; The Webpage may monitor the positions of the users with high value. When the Webpage judges that the positions of users may have a great impact on the market stability, it will take corresponding measures, including but not limited to communication, revealing risks, forced underweight, forced liquidation and so on, and it will give the users written explanations.

(2) The derivatives transaction rules of the digital asset derivatives market, including but not limited to the adjustment coefficient, due date, product rules and others, can be modified according to the actual operation of the Webpage. If the Webpage needs to deliver products ahead of schedule or later due to special circumstances, the user shall handle the position in time after the official website performs the notification obligation through official website announcement or SMS notification, the users shall assume all possible losses or profits arising therefrom on their own.

Notice:

1. Innovative option trading is a kind of digital asset financial derivatives with great risk. Before participating in the transaction, investors must fully understand the basic knowledge and related risks of financial derivatives transaction and all relevant business rules of participating in innovative option trading, and carefully read and agree with AOFEXUser agreement and Innovative Option Trading Agreement, and fully understand and tolerant all transaction risks caused by strong fluctuations in the price of digital assets.
2. The above-mentioned risk items are only partial risks, and all risk factors related to the transaction of digital asset derivatives are not listed in detail. Investors should also seriously understand and master other possible risk factors before participating in the investment of digital asset derivatives trading. If, according to reasonable commercial judgment, the platform considers that you have violated this agreement, or you are not allowed to provide services under the laws of your country or region, or you use the services provided by the platform to engage in criminal activities, the platform has the right to temporarily or permanently freeze your account at any time, or suspend or terminate your use of all or part of the digital assets provided by the platform Trading services.
3. The premise for the mark price to take effect is: the effective weight exchange is greater than or equal to 3, otherwise, the option transaction may not be completed. You understand and agree that the option transaction affected by the above situation will be deemed as invalid transaction, and the digital assets used to purchase the above options will be returned to the user's trading account free of charge. The platform will modify the index composition and weight from time to time according to the real-time transaction data of the five major exchanges, so as to ensure the validity and fairness of the data, and publish the adjustment announcement.
4. Any comments, news, discussion, analysis, price, suggestion, chat room content, information and KOL articles on this platform are general market comments and do not constitute investment suggestions. The platform will not bear any direct or indirect losses caused by users' reliance on such information, including but not limited to any loss of profits.
5. It is forbidden to use the platform to conduct all immoral or illegal trading activities such as malicious market manipulation and improper trading. If such incidents are found, the platform will take preventive measures such as warning, restricting transactions, closing accounts and other immoral or law violating users who maliciously manipulate prices and maliciously affect trading systems without anyresponsibility,and reserve the right to investigate the relevant persons.
6. Monitoring Transactions

1) The platform will set and adjust the daily transaction and withdrawal maximum limit according to the security and actual transaction situation;

2) If the transactions are frequently concentrated in a registered user, or there are unreasonable situations in a certain transaction or some transactions, the professional team of the platform will evaluate and determine whether they are suspicious transactions;

3) When the platform determines a certain transaction or some transactions as suspicious transactions by its own judgment, the platform may take restrictive measures such as suspending such transactions, rejecting such transactions, or even canceling such transactions that have occurred, while reporting to the competent authorities without further notice;

4) The platform reserves the right to reject the registration application of investors or deemed as PEP from the jurisdiction that does not meet the international anti money laundering standards. At the same time, according to its own reasonable commercial judgment, the platform reserves the right to suspend or terminate any suspicious transaction at any time, without any responsibility or obligation.

Options Trading Tutorials:

For APP:  Options Trading Tutorial（APP）

For PC:  Option Trading Tutorial（PC）

AOFEX Team