# Exchange Trading Features

## Spot Markets

### Market Creation and Instant Launch

* **Governance Creation:** Curated listings deployed via a formal `MsgCreateSpotMarket` proposal.
* **Instant Launch:** A permissionless pathway (`MsgInstantSpotMarketLaunch`) where users can pay a configured network listing fee to instantly activate a market.

### Order Execution and Time-in-Force Semantics

* **Market Orders:** Execute immediately against the best available liquidity. Require a user-defined "worst price" bound to protect against unbounded slippage.
* **Limit Orders:** Support explicit `TimeInForce` parameters:
  * **GTC (Good-Till-Cancelled):** The order rests on the orderbook until completely filled or manually cancelled.
  * **IOC (Immediate-Or-Cancel):** The order matches immediately; any unfilled remaining quantity is instantly cancelled.
  * **FOK (Fill-Or-Kill):** The entire quantity must be filled at the limit price or better, or the entire order is rejected.

### Maker Protection (Post-Only Enforcement)

A per-order `is_post_only` flag guarantees the order will only add liquidity to the book. A market-level `enforce_post_only` mode can be toggled by governance to strictly disallow market orders. Post-only flags are mutually exclusive with IOC/FOK instructions.

### Conditional Order Engine

Advanced trading primitives — including `STOP_LOSS`, `TAKE_PROFIT`, `STOP_LIMIT`, and `TRAILING_STOP` — are evaluated deterministically at the start of every block during the `BeginBlocker` phase.

## Derivatives Markets

### Margin Accounting and Risk Limits

Derivative order placement enforces strict margin requirements prior to execution. Positions are tracked deterministically per `(subaccount_id, market_id)`. The protocol enforces critical risk limits during order creation, including open notional caps and market-wide open interest checks. The `reduce_only` flag guarantees an order can only decrease or close an existing position.

### Perpetual Funding Rate Mechanism

$$Premium = \frac{MarkPrice - IndexPrice}{IndexPrice}$$

The final calculated rate is strictly clamped to a bounded range defined by the market parameters before being applied to all active positions.

### Automated Liquidation Engine

When a position's margin falls below the maintenance threshold, the automated liquidation engine (executed during the `EndBlocker`) uses a risk-index candidate selection approach, processing only the most critical underwater positions within a strict per-block budget.

### TWAP-Based Settlement for Expiry Futures

Once an Expiry Future market reaches its predefined `expiry_timestamp`, settlement is triggered during the `BeginBlocker`. The primary settlement price is resolved via an Oracle TWAP taken over an immutable settlement window. Upon successful settlement, the market transitions permanently to a `DEMOLISHED` state.

## Binary Options

Binary Options represent event-driven, probability-based markets where traders speculate on specific, bounded outcomes.

### Margin Requirements

Because binary options have absolute bounded payouts, the protocol enforces a strict pricing invariant where *P ∈ \[0, 1]*:

* **Long (YES) Margin:** *Margin = P × Q*
* **Short (NO) Margin:** *Margin = (1 − P) × Q*

### Lifecycle State Machine

Binary markets follow a strict state machine processed during the `BeginBlocker`:

1. **Trading (ACTIVE):** Orders are matched and positions are accumulated.
2. **Expiration (PAUSED):** Triggered when the current block time exceeds `expiration_timestamp`. Trading is instantly halted and all resting orders are cancelled.
3. **Settlement (DEMOLISHED):** Triggered when the `settlement_timestamp` is reached. The protocol retrieves the Oracle outcome, resolving the market to a definitive 0 or 1. Payouts are distributed and the market is closed.


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