Trading rules

Jun 08, 2017

1.Trading on GDAX

1.1GDAX operates a central limit order book trading platform, and settles trades in a number of Digital Asset and Fiat Currency Trading Pairs. Each Trader’s Account will list which Order Books are available to the Trader.


Orders

1.2To place an Order on an Order Book, a Trader must have an Available Balance of the relevant Asset in their Account which is sufficient to cover the total value of the Order plus any applicable fees. See section 2 for special rules about Margin Trading.

1.3When a Trader places an Order, that quantity of the relevant Asset becomes subject to a Hold.

1.4A Trader can place an Order as either a Limit Order, a Market Order, or a Stop Order.

1.5A Trader may cancel an open Maker Order or Stop Order at any time before it is Filled. No fees are charged for cancelled Orders.


Limit Orders

1.6A Limit Order is an Order to buy or sell a specified quantity of an Asset at a specified price.

1.7A Limit Order will only ever Fill at the specified price or a better price.

1.8A Limit Order with ‘post-only’ selected will only be posted to the Order Book if it would not be posted at the same price as an existing Order on the Order Book. A Limit Order with ‘post-only’ selected will always be a Maker Order.

1.9A Limit Order without ‘post-only’ selected will be immediately posted to the Order Book (subject to any Time in Force Instructions) and can result in a Maker Order or a Taker Order, or an Order that is partially a Maker Order and partially a Taker Order.


Market Orders

1.10A Market Order is an Order to buy or sell a specified quantity of an Asset at the best available price of existing Orders on the Order Book.

1.11There is no guarantee that a Market Order will Fill at the price specified. A Market Order may Fill at a number of different prices, based on the quantity of the Market Order and the quantities of the existing Orders on the Order Book at the time.

1.12Depending on the volume and prices of Orders on the Order Book at the time when a Market Order is posted, the Market Order may Fill at a price less favorable than the most recent trade price, in some cases significantly so. This is commonly referred to as ‘slippage’.

1.13A valid Market Order will be immediately posted to the Order Book. A Market Order is always a Taker Order.


Stop Orders

1.14A Stop Order is an instruction to post an Order to buy or sell a specified quantity of an Asset but only if and when the last trade price on the Order Book equals or surpasses the Stop Price.

1.15Once a Stop Order has been placed, it is considered ‘active’ until it executes by posting the relevant Order when the Stop Price is triggered.

1.16A Stop Order is not posted to the Order Book and is not visible to other Traders, but any resulting Order is posted and visible. All Stop Orders are placed without 'post-only' enabled.

1.17A Stop Order can be placed as either a Stop Market Order, which posts a Market Order when the Stop Price is triggered, or a Stop Limit Order, which posts a Limit Order when the Stop Price is triggered.

1.18A Stop Market Order is subject to slippage in the same way as ordinary Market Orders. A Stop Limit Order is not guaranteed to Fill. The Web Interface will display a warning each time a Trader attempts to place a Stop Order.


Time in Force Instruction

1.19Stop Orders and Limit Orders may be placed with one of the following Time in Force Instructions.

a. Good til Cancelled: if posted, the Order will remain on the Order Book until cancelled by the Trader. This is the default Time in Force Instruction.

b. Immediate or Cancel: the Order will only be posted to the Order Book to the extent that it would be immediately Filled; any remaining quantity is cancelled. This results in a Taker Order.

c. Fill or Kill: the Order will only be posted to the Order Book if it would be immediately and completely Filled. This results in a Taker Order.


Warnings

1.20The Web Interface will display a warning to Traders who attempt to place an Order which would completely or partially fill at a price which is more than 5% away from the last trade price (slippage warning).

Posting of Orders to the Order Book

1.21(Taker Order) If an Order is posted to the Order Book at the same price as one or more existing Orders, it is a Taker Order which will result in an immediate Fill at that price, to the extent of the total quantity of those existing Orders.

1.22(Maker Order) To the extent that an Order is posted to the Order Book at a different price to all existing Orders, it is a Maker Order which will remain open at that price on the Order Book until:

a. it is cancelled by the Trader;

b. it expires due to a Time in Force Instruction; or

c. it is completely Filled by one or more Taker Orders placed by another Trader at the same price.


Matching Engine and Order Priority

1.23GDAX matches Taker Orders with Open Maker Orders on each Order Book based on Price-Time Priority.

1.24Price-Time Priority means that each time a Taker Order is posted:

a. the Taker Order is matched with the earliest in time Maker Order at the best price on the Order Book; and

b. to the extent that the Taker Order is not completely Filled by that Maker Order, it is matched with any subsequent Maker Orders at that price, in the sequence those Maker Orders were posted; and

c. to the extent that the Taker Order is not completely Filled by one or more Maker Orders described above, it is matched with one or more Maker Orders at the next best price, in the sequence those Maker Orders were posted, and this process is repeated until the Taker Order is completely Filled.

1.25All Traders on GDAX are subject to the same Price-Time Priority.

1.26Subject to Time in Force Instructions, an Order may be matched with a number of corresponding Orders at the same price.


Fills and Settlement

1.27When a Maker Order is matched with a Taker Order, those Orders are Filled. An Order may be matched with and Filled by one or more Orders at the same price.

1.28GDAX settles all Filled Orders immediately, by debiting and crediting the relevant balances of Assets in both Traders’ Accounts.

1.29Subject to daily withdrawal limits (and further restrictions if Margin Trading is activated) a Trader may immediately withdraw all Assets in their Account.


Taker Price Improvement

1.30Taker Orders are matched with the best available existing Maker Orders. This means that a Limit Order placed outside the market (i.e. a sell Order below the highest existing buy Order, or a buy Order above the lowest existing Sell Order) will be Filled by the best available existing Order rather than an existing Order with the same price as the Limit Order.


Trading Fees

1.31GDAX charges a fee for each Taker Order that is posted to the Order Book. The fee is charged in the Quote Asset and is calculated as a percentage of the Order quantity.

1.32The fee is charged by debiting the Trader’s Available Balance for the amount of the fee at time time that the Taker Order is posted.

1.33There is no fee for Maker Orders.

1.34If an Order is posted to the Order Book partially as a Maker Order and partially as a Taker Order, a fee applies to the extent it is posted as a Taker order.

1.35Fees may vary between Order Books. The current fee rates can be found at gdax.com/fees

1.36All Traders pay the same trading fees. GDAX does not provide preferential or discounted fees.


Fee Rebates

1.37All Traders are eligible for fee rebates based on the total volume of their Fills on each Order Book.

1.38The rebate is calculated at the end of each day (UTC 00:00), and is calculated separately for each Order Book. The rebate is based on the percentage of the total volume traded on the Order Book over the preceding 30 days that is represented by the Trader’s Fills (User 30 Day Volume).

1.39A Trader is assigned a discounted fee rate if their User 30 Day Volume meets or exceeds the relevant thresholds. The Trader’s fees for Taker Orders during that period are recalculated based on the discounted fee rate and the difference is issued as a credit to the Trader in the Quote Asset. The current thresholds and discounted fee rates can be found at gdax.com/fees.

1.40All Traders are eligible for the same Fee Rebates and have the same thresholds and discounted fee rates.

 

2.Margin Trading

2.1Margin Trading enables Traders to access additional funding to place Orders in excess of their Available Balance for a temporary period.


Margin Orders

2.2Eligible Traders may place Orders using Margin Trading (Margin Order).

2.3A Margin Order is valid if it would not exceed the Trader’s Margin Funding Limit or cause the Trader’s Margin Ratio to fall to or below the Initial Maintenance Requirement.

2.4Traders may place any number of Margin Orders, up to their maximum amount of Margin Funding available.

2.5Margin Orders are entered on the relevant Order Book in the same way as regular Orders, and appear to all other users as regular Orders.

2.6Margin Orders are treated with the same Price-Time Priority as regular Orders.

2.7All Orders on an Order Book are eligible to be matched with all other Orders, regardless of whether they are Margin Orders or Regular Orders. If and when a Margin Order matches with another Order, it is filled in the same way as a regular Order.

2.8Trading fees are charged on Margin Orders in the same way as regular Orders i.e. a fee is charged to the extent that a Margin Order is a Taker Order.

2.9There are no other fees, charges or interest charged for accessing Margin Trading or using Margin Funding.


Margin Funding

2.10Each time a Trader places a valid Margin Order that would exceed their Available Balance, funding is automatically provided for the required amount (Margin Funding).

2.11Traders can access Margin Funding to place either long or short Orders on an Order Book. It is not possible to ‘naked short sell’ any Asset on GDAX because a Trader must always have a sufficient balance in their Account or use Margin Funding to place a sell Order.

2.12Regardless of whether a Margin Order is filled, cancelled, or remains open, the corresponding Margin Funding continues to be outstanding until it is Closed.

2.13A Trader’s Margin Funding Limit, Initial Margin Requirement, Maintenance Margin Requirement, and Margin Ratio are determined by reference to the Assets traded on each Order Book, without reference to other Assets in other Order Books.

2.14When one or more Margin Fundings is outstanding:

a. the Trader’s balance of the funded Asset is negative; and

b. the Trader is not able to withdraw Assets from their Account.  


Closing Margin Funding

2.15Each Margin Funding must be Closed within 27 days and 22 hours.

2.16A Margin Funding is Closed when the full amount of the Margin Funding has been credited to the Trader’s Account for that Asset.

2.17Any time that a Trader has one or more outstanding Margin Fundings of an Asset and an amount of that Asset is credited to the Trader’s Account, that amount is automatically applied toward the oldest outstanding Margin Funding of that Asset. This can occur as a result of:

a. an Order being Filled which results in proceeds in the Asset;

b. an Order being cancelled or expiring which releases a Hold of that Asset; or

c. the Trader depositing the Asset from an external source.

2.18A Trader can place an instruction (Close Position) to automatically cancel all Open Orders and post a Market Order of sufficient quantity to achieve one of the following.

a. Close all outstanding Margin Fundings (Settle); or

b. Convert the Trader’s entire position to the opposing Asset of the Trading Pair, plus any further Assets if necessary to Close all outstanding Margin Fundings (Realize Profit/Loss).

The default Close Position instruction is Settle.

2.19A Trader may have any number of Margin Fundings open at any time (subject to their Maintenance Margin Requirement and Margin Funding Limit) but each Margin Funding must be Closed within 27 days and 22 hours


Forced Close

2.20If a Margin Funding is outstanding after 27 days and 22 hours, then one or both of the following actions occur (Forced Close):

a. first, all of the Trader’s Open Orders on the Order Book are cancelled; and

b. then, if required, a Market Order of sufficient quantity to fully Close the relevant Margin Funding is placed on the Order book.

2.21Immediately after a Forced Close is Filled, the proceeds are applied to fully Close the relevant Margin Funding, and any excess Assets are credited against outstanding Margin Fundings in (oldest first) and any excess Assets then result in a positive balance of that Asset.


Margin Ratio

2.22At any that time a Trader has one or more outstanding Margin Fundings, they have a Margin Ratio for that Order Book. The Margin Ratio is calculated as:
 

Margin Ratio = Equity / Outstanding Margin Funding

where:

Equity = Total Asset Value - Outstanding Margin Funding

Total Asset Value = means the gross value of all of a Trader’s Assets for the relevant Order Book, expressed in the Quote Asset based on the last trade price. This includes all Assets acquired using Margin Funding and all Assets allocated to Open Orders but disregards any Outstanding Margin Funding.

Outstanding Margin Funding = Trader’s total outstanding Margin Fundings for the Order Book, expressed in the Quote Asset based on the last trade price.


Maintenance Margin Requirement

2.23Each Trader must maintain a Margin Ratio in excess of their Maintenance Margin Requirement at all times.

2.24A Trader can improve their Margin Ratio for an Order Book at any time by:

a. depositing Assets from an external source to the Order Book;

b. cancelling Orders on the Order Book; or

c. trading on the Order Book to adjust their relative balances of Assets.


Margin Call

2.25If a Trader’s Margin Ratio falls to or below the Maintenance Margin Requirement, then a Market Order of sufficient quantity to Close all outstanding Margin Fundings is automatically placed on the Order Book (Margin Call).

2.26Immediately after a Margin Call is Filled, the proceeds are applied to Close all outstanding Margin Fundings and any excess Assets result in a positive balance of that Asset.

 

3.Market Integrity

All Trades are Final

3.1All Fills are final and will not be reversed unless:

a. Coinbase is compelled to do so by any applicable law or regulation; or

b. Due to a serious technical error, Orders or Fills do not occur as specified in these Rules - in which case Coinbase will make all reasonable efforts to restore all Traders to the position they would have been in had the error not occurred.

3.2Coinbase may cancel Open Orders in the following circumstances.

a. Orders placed by Traders who, in our sole discretion, have engaged in abusive use of the platform, for example, Market Manipulation, or using the API in a manner which unreasonably burdens the platform.

b. Orders which under the circumstances involve an obvious error with respect to price, quantity, or other parameters - a ‘clearly erroneous transaction’.

c. If required by any applicable law or regulation, including specifically where Coinbase is required to suspend or terminate a Trader’s GDAX Account or Coinbase Account.

d. If required for technical reasons as set out in section 3.4 or 3.5. below.

Access to GDAX

3.3All Traders have equal access to the GDAX API and Web Interface. Coinbase does not provide prioritized access to any Trader.


Interruptions

3.4If technical reasons prevent or degrade Traders’ ability to place or cancel Orders, or prevent or degrade access to GDAX API or the Web Interface or affect the operation of GDAX Order Books or matching engines, then Coinbase may, in its discretion, take one or more of the following actions in respect of one or more Order Books.

a. Temporarily disable depositing or withdrawing Assets.

b. Cancel Open Orders.

c. Disable the ability to place new Orders (Cancel-Only Mode).

d. Disable sign-in.

e. Disable the GDAX API.

f. Disable access to the Web Interface.

3.5If access to GDAX through the Web Interface is unavailable for 5 minutes or longer, Coinbase will move GDAX to Cancel-Only Mode as soon as possible.

3.6If GDAX is in Cancel-only Mode, it will be restored to fully operational only after access through the Web Interface becomes available for at least 5 minutes and Coinbase deems is it safe to restore GDAX to fully operational.

3.7Coinbase will notify Traders of the move to or from Cancel-Only Mode via status.gdax.com and @gdax on Twitter.


Self-trade Prevention

3.8Traders are not able to place an Order which would result in self-execution—i.e., where the same Trader would act as both the maker and taker for the trade.

3.9If two Orders of the same quantity would result in self-execution, both Orders are cancelled.

3.10If two Orders of different quantities would result in self-execution, the smaller Order is cancelled and the larger order is decremented by an amount equivalent to the smaller quantity. The remainder of the larger order remains Open.


Flash Crashes and Circuit Breakers

3.11GDAX does not use artificial market integrity measures such as ‘circuit breakers’ or trading halts.


Market manipulation prohibited

3.12Traders are prohibited from engaging in Market Manipulation.

3.13Market Manipulation means actions taken by a Trader or a person acting in concert with a Trader, which are intended to:

a. deceive or mislead other Traders;

b. artificially control or manipulate the price or trading volume of an Asset; or

c. aid, abet, enable, finance, support, or endorse either of the above.

and may include actions on GDAX and/or outside of GDAX.

3.14Market Manipulation specifically includes, without limitation: front-running, wash trading, spoofing, layering, churning, and quote stuffing.

 

4.Access to Information

4.1All Traders have full and equal real-time access to Market Data. Market Data is made available through the Web Interface or the GDAX API.  

4.2Market Data comprises the following.

a. All Limit Orders placed on the Order Book (price, quantity, and time).

b. All cancelled Orders on the Order Book (price, quantity, and time).

c. All Fills (price, quantity, and time).

4.3Market Data does not include the following.

a. resting Stop Orders (Stop Orders that have been placed but not triggered)

b. Any information about which Trader placed or cancelled an order.


Coinbase corporate operations

4.4Coinbase, Inc., which owns and operates GDAX, also trades its own corporate funds on GDAX.

4.5Coinbase does not have any special priority and subject to the same Price Time Priority and fee structure as all other Traders.

4.6The Coinbase application which trades on GDAX only trades based on Market Data and does not have access to inside information. It does not engage in any front-running.


Coinbase employee access

4.7Coinbase policies prohibit all Coinbase employees from using inside, corporate or proprietary information to trade Digital Assets.
 

5. Scheduled Downtime

From time to time, GDAX may undergo a temporary outage for maintenance or upgrades. Each time, the process below will be followed.


Step 1
Timing: At least 7 days prior to scheduled downtime
Action:

  • Announce scheduled downtime via status.gdax.com and @GDAX on Twitter

  • Commence displaying banner on Web Interface

  • Send email to all Traders

Step 2
Timing: 2 days prior to scheduled downtime
Action:

  • Disable new Margin Funding

  • If scheduled for 5 minutes or more of downtime, send email to all Traders who have outstanding Margin Funding

Step 3
Timing: At scheduled downtime

Action:

If scheduled for less than 5 minutes of downtime:

  • Implement Cancel-Only Mode

  • Implement Trading Halt

  • Confirm the above via @GDAX on Twitter, status.gdax.com and Web Interface banner

If scheduled for 5 minutes or more of downtime:

  • Administer a Forced Close of all Margin Fundings chronologically (oldest fundings first)

  • Implement Cancel-Only Mode

  • Cancel all Open Orders

  • Implement Trading Halt

  • Confirm the above via @GDAX on Twitter, status.gdax.com and Web Interface banner

Step 4
Timing: Immediately after maintenance or upgrades are complete
Action:

  • Enter Post-Only mode

  • Confirm the above via @GDAX on Twitter, status.gdax.com and Web Interface banner

Step 5
Timing: At least 5 minutes after Step 4, or longer if required
Action:

  • Announce that Trading Mode will be implemented at a specified time, no less than 5 minutes in the future) via @GDAX on Twitter, status.gdax.com and Web Interface banner

Step 6
Timing: At the time specified in Step 5
Action:

  • Enter Trading Mode

Step 7
Timing: At least 1 hour after Step 6, or longer if required
Action:

  • Enable margin trading

  • Confirm the above via @GDAX on Twitter, status.gdax.com and Web Interface banner 

Step 8

Timing: After Step 7
Action:

  • Send email to Traders who had a Forced Close of Margin Funding

  • Send email to Traders who had one or more open Orders cancelled

 

6.Definitions

In these GDAX Trading Rules, the following words and phrases have the corresponding meanings.

Account means a Trader’s GDAX Account.

Asset means a Digital Asset or Fiat Currency.

Available Balance means a Trader’s Total Asset Value less any amounts held for Open Orders and fees. Note: when using Margin Trading through the GDAX API, ‘Available Balance’ means a Trader’s Total Asset Value less any amounts held for Open Orders and fees, and less Outstanding Margin Funding.

Base Asset means the Asset being traded on the Order Book; the first Asset in the Trading Pair. For example, on the BTC-USD Order Book, BTC is the Base Asset and USD is the Quote Asset.

Cancel-only Mode means that Traders cannot place new Orders. Traders are able to cancel open Orders. No Orders will be filled.

Close means to end a Margin Funding. See sections 2.15 and 2.16.

Close Position in Margin Trading, means an instruction to automatically cancel all Open Orders and post one or more Market Orders to Close all outstanding Margin Fundings.

Digital Asset means a blockchain-based digital currency, app coin or protocol token which is offered for trading on GDAX.

Equity in Margin Trading, means a Trader’s Total Asset Value less Outstanding Margin Funding.

Fiat Currency means a government-issued currency.

Fill means a match of two Orders.

Forced Close means an automatic Settling of a Margin Funding after 27 days and 22 hours. See sections 2.20 and 2.21.

Hold means the setting aside of Assets allocated to an Order.

Initial Margin Requirement means the Margin Ratio required to access further Margin Funding or withdraw Assets.

Limit Order means an Order to buy or sell a specified quantity of an Asset at a specified price.

Maintenance Margin Requirement means the Margin Ratio at which a Margin Call will be issued.

Margin Call means a Market Order of sufficient quantity to Close all outstanding Margin Fundings which is automatically placed when the Trader’s Margin Ratio falls to or below their Maintenance Margin Requirement. See sections 2.25 and 2.26.

Margin Funding means the funding provided to Traders in Margin Trading. See section 2.10.

Margin Funding Limit means the maximum amount of Margin Funding that a Trader may have outstanding for each Order Book, denominated in the relevant Quote Currency.

Margin Order means an order that uses Margin Funding.

Margin Ratio means the ratio of a Trader’s Equity to Outstanding Funding. See section 2.19.

Margin Trading means gaining access to funding to place Orders in excess of the Available Balance for a temporary period.

Market Order means an Order to buy or sell a specified quantity of an Asset at the best available price of existing Orders on the Order Book.

Order means an instruction to buy or sell a specified quantity of the Base Asset at a specified price in the Quote Asset.

Order Book means each order book on which Orders are placed for trading in a Trading Pair.

Open Order means a Maker Order which has been posted but not Filled, cancelled or expired, or a Stop Order which is currently active.

Outstanding Margin Funding means a Trader’s total of Margin Fundings for the Order Book that have not been Closed, expressed in the Quote Asset based on the last trade price.

Post-only Mode means that Traders can only place an Order if it would be posted to the Order Book as a Maker Order. An Order which would be posted as a Taker Order will be rejected. No Orders will be filled.

Price-Time Priority means that earlier in time Orders have priority over later Orders. See sections 1.23 and 1.24.

Quote Asset means the Asset in which trading is denominated on the Order Book; the second Asset in the Trading Pair. For example, on the BTC/USD Order Book, BTC is the Base Asset and USD is the Quote Asset.

Scheduled Downtime means a planned temporary outage for maintenance or upgrades. See section 5.

Stop Order means an instruction to post an Order to buy or sell a specified quantity of an Asset but only if and when the last trade price on the Order Book equals or surpasses the Stop Price.

Stop Price means the price specified in a Stop Order.

Total Asset Value means the gross value of all of a Trader’s Assets for the relevant Order Book, expressed in the Quote Asset based on the last trade price. This includes all Assets acquired using Margin Funding and all Assets allocated to Open Orders but disregards any Outstanding Margin Funding.

Trader means each customer trading on GDAX.

Trading Halt means that Traders cannot place or cancel any Orders.

Trading Mode means normal operation of GDAX. Traders can place Market Orders and Limit orders and can cancel Orders.

​Trading Pair means each pair of a Base Asset and a Quote Asset offered on GDAX.

Web Interface means the user interface available through https://www.gdax.com.

 

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