What Are the Challenges in Normalizing Contract Specifications (E.g. Expiry Formats) across Exchanges?
Exchanges use non-standardized symbols (e.g. BTC-PERP vs.
BTCUSD-SWAP) and different formats for expiry dates (e.g. YYYYMMDD vs.
YYMMDD). Normalization must handle these inconsistencies to create a unified product identifier.
Furthermore, differences in tick size, contract size, and margin calculation rules also require mapping and standardization. Incorrect normalization leads to pricing errors and failed trade executions.
Glossar
Expiry
Settlement ⎊ Expiry, within cryptocurrency derivatives, denotes the final date and time at which an options contract or futures contract is fulfilled, resulting in the transfer of the underlying asset or its cash equivalent.
Consolidated Order Book
Aggregation ⎊ A consolidated order book in cryptocurrency, options, and derivatives represents a unified view of liquidity, aggregating order information from multiple exchanges or trading venues into a single feed.
Margin Calculation Rules
Calculation ⎊ The determination of margin requirements within cryptocurrency derivatives, options, and financial derivatives hinges on a multifaceted assessment of underlying asset volatility, leverage employed, and prevailing market conditions.
Canonical Data Model
Foundation ⎊ A Canonical Data Model within cryptocurrency, options trading, and financial derivatives establishes a standardized representation of asset characteristics and associated contractual terms, facilitating interoperability between disparate systems.