Nitro Spreads is an order book for spreads within the Liquid Marketplace, enabling users to trade spreads and bases seamlessly. Spread trading is a strategic approach that capitalizes on the price difference—known as the spread—between related assets across different markets, typically involving the same underlying or reference instrument.
Traditionally, spread trading required traders to manually open positions across two separate order books. With Nitro Spreads, traders can now execute spread trades with a single click. All orders placed through Nitro Spreads are guaranteed to be filled in corresponding quantities for each leg or not at all. This minimizes the risk of a partial fill and reduces price slippage. The platform supports various strategies, including cost-of-carry farming, spot-futures carry trades, and calendar rolls.
How Does Spread Trading Work?
Spread trading commonly takes forms such as spot versus perpetual (e.g., BTC/USDT spot versus BTC/USDT perpetual), spot versus futures (e.g., ETH/USDT spot versus ETH/USD quarterly futures), or two futures with different expiration dates (e.g., quarterly versus semi-annual LTC/USDT futures).
Experienced traders can profit from price differences (spreads) between instruments. This strategy involves simultaneously opening two positions in opposite directions (long and short), each with the same notional value. Spreads are designed to be delta-neutral, meaning the strategy carries no delta risk.
Delta measures how an instrument’s price changes relative to a reference asset. For example, if the BTC/USDT price increases by 1 USDT, the price of BTC/USDT quarterly futures would also be expected to rise by approximately 1 USDT. If both the spot and futures prices move up by 1, and a trader holds one long and one short position, the overall value of their position remains unchanged (delta risk on one side is offset by the other, resulting in neutrality). This stability and risk protection are key advantages of spread trading.
How to Trade on OKX Nitro Spreads
Placing an Order
- Log in and navigate to Trade > Liquid Marketplace > Nitro Spreads.
- Select the market you wish to trade: currently, BTC/USDT and ETH/USDT are available.
In the Nitro Spreads section, choose an available reservation for the spread you want to buy or sell:
- Select Bid to buy the spread.
- Select Ask to sell the spread.
- Once the order book for your selected spread appears, enter the price and quantity, then place the order.
- Review the order details and execute the trade.
Note:
- To proceed with Liquid Marketplace, you must complete the required verification.
- If your order price exceeds the best available price in the order book (bid when buying, ask when selling), the order will be filled immediately. Otherwise, it will be added to the respective order book.
- Open orders remaining unmatched after 7 days will be automatically canceled.
Canceling an Order
There are two methods to cancel an order in Nitro Spreads:
Option 1:
- Locate the tile in the Nitro Spreads table with a circle indicating the number of open orders for that spread.
- In the Open orders section, cancel the specific order you wish to remove.
Option 2:
- Open the Nitro Spreads page and navigate to Open orders.
- Cancel the desired order directly from the order details section.
Immediate Execution for Open Orders
If you prefer not to wait for execution and want to request quotes directly from qualified market makers, select the Submit as RFQ option in the Open orders section for instant quotes and fulfillment.
Fee Structure for Nitro Spreads
- VIP users enjoy 50% lower fees on Nitro Spreads compared to executing two separate legs in a typical order book.
- Regular users pay the standard fee for each leg of the respective instrument.
Frequently Asked Questions
What tokens and instrument types does Nitro Spreads support?
Currently, Nitro Spreads supports tokens like BTC and ETH, along with USDT-margined futures and perpetual contracts. Additional tokens and instrument types may be added in the future. You can explore available options under Trade > Liquid Marketplace > Nitro Spreads.
What spread combinations are currently supported?
OKX now supports: spot vs. perpetual, spot vs. futures, perpetual vs. futures, and futures vs. futures. Futures instruments include semi-annual and quarterly expiries.
How do I interpret bid and ask prices on spread tiles?
The prices on tiles represent the spread between the execution prices of the two instruments. The spread equals the price of the later-dated instrument minus the earlier-dated instrument after trade execution.
- Bid: The price you receive (or pay if the spread is negative) when selling the spread (buying the earlier-dated instrument and selling the later-dated one).
- Ask: The price you pay (or receive if the spread is negative) when buying the spread (selling the earlier-dated instrument and buying the later-dated one).
The order of instrument dates in Nitro Spreads, from latest to earliest, is: Semi-annual futures > Quarterly futures > Perpetual swaps > Spot.
What is BBO Improvement?
BBO Improvement, or Best-Bid-Offer Improvement, is a key metric displayed before order placement. It reflects the difference between the best price in Nitro Spreads and the implied best price from executing the same strategy in the central order book, without considering quantity. A negative BBO Improvement indicates that Nitro Spreads offers a better price, highlighted by a white border around the tile.
The implied best price for the ask side is calculated as the lowest ask price of the later-dated leg minus the highest bid price of the earlier-dated leg. For the bid side, it is the highest bid price of the later-dated leg minus the lowest ask price of the earlier-dated leg.
Is liquidity shared between Nitro Spreads and central order books?
No, Nitro Spreads liquidity is dedicated solely to Nitro Spreads. Orders here are not visible in central order books, and vice versa.
Can I trade individual legs in the central order book after settling on Nitro Spreads?
Yes, after buying or selling a spread on Nitro Spreads, the individual legs become separate positions that can be traded independently in the central order book.
Can I use existing central order book positions or assets as margin for Nitro Spreads trading?
Yes, within the OKX ecosystem, existing leg positions from the central order book can be traded or used as margin for Nitro Spreads transactions. 👉 Explore advanced trading strategies to maximize your portfolio efficiency.
This integrated approach ensures flexibility and optimized resource utilization for traders.