Nitro Spreads Introduction

Published on 7 Mar 2024Updated on 10 Jul 20243 min read

Nitro Spreads

Nitro Spreads is a spread order book within Liquid Marketplace for you to trade spreads and basis. Spread trading capitalizes on spreads, i.e. price differences between related assets across different markets, usually with the same underlying or reference instrument.

Nitro Spreads simplifies spread trading by simplifying the process for you. No more juggling positions across separate order books. With Nitro Spreads, executing spread trades becomes as easy as a single click.

Key features and benefits

  • One-click trading: Execute spread trades seamlessly with just one click, eliminating manual steps.

  • Atomic execution: Enjoy guaranteed fills for each leg of the trade in matching quantities or none at all, hence having zero leg risk and minimizing price slippage.

  • Versatile strategies: Explore various trading strategies such as funding rate arbitrage, spot futures carry trade, and calendar spread with ease.

Understanding key terms

Spread

The price difference between related assets across different markets, usually with the same underlying or reference instrument.

Buying a spread means buying the further dated instrument and selling the nearer dated instrument.
Selling a spread means selling the further dated instrument and buying the nearer dated instrument.
*Perpetual is considered further dated than spot.

Atomic execution

Guaranteed fills for each leg of the trade in matching quantities or none at all, hence having zero leg risk and minimizing price slippage.

Bid and ask prices

In our context, the prices displayed on the tiles indicate the spread price between filled prices of 2 instruments after a trade. This spread price is equal to the executed price of the further dated instrument minus that of the nearer dated instrument. Here’s a breakdown:

  • Bid price: It represents the price paid (or received when the spread price is negative) when buying the spread. In simpler terms, it’s what you pay (or receive when negative) when buying the further dated instrument and selling the nearer dated instrument.

  • Ask price: It represents the price received (or paid when the spread price is negative) when selling the spread. In simpler terms, it’s what you receive (or pay when negative) when selling the further dated instrument and buying the nearer dated instrument.

Leg price assignment

In Nitro Spreads, executed leg prices are automatically calculated based on the price of the spread you traded and the individual mark prices of each leg. The difference between the 2 executed leg prices exactly matches the spread price traded.

Fees

Fees on Nitro Spreads are 50% lower than executing trades using 2 separate legs in traditional order books. For more details, visit https://www.okx.com/fees.