1. Exchange Architecture
The Company operates as a Central Limit Order Book (CLOB) exchange, aggregating all buy and sell orders into a single transparent order book that displays the best available prices and quantities to all participants simultaneously. Orders are executed based on strict price-time priority rules, ensuring that the best-priced orders execute first, and among orders at the same price, those received earlier have priority (subject to a speed bump which is implemented to protect against latency arbitrage - see section 7 below). This architecture provides price transparency, guarantees fair execution, and promotes efficient price discovery by bringing all market participants together in a single venue.
2. Order Types
2.1. Market Orders
Market orders execute immediately at the best available price in the current market. They provide certainty of execution but not certainty of price, as the final execution price depends on the current order book state. Market orders cannot be combined with Good-Till-Cancelled (GTC) instructions due to their immediate execution nature.
2.2. Limit Orders
Limit orders specify both quantity and a maximum price for buy orders or minimum price for sell orders. If the order cannot be immediately executed, it is placed in the order book at the specified price.
2.3. Add Liquidity Only (ALO) Orders
ALO orders are specialized limit orders that only execute if they add liquidity to the market rather than removing existing liquidity. If an ALO order would execute immediately against existing orders, it is cancelled instead.
3. Time Enforcement Instructions
3.1. Fill-or-Kill (FOK)
FOK orders must be executed in their entirety immediately or be cancelled completely. They ensure that participants can execute large quantities with certainty about the final position size, making them suitable for hedging strategies where partial fills would be problematic.
IOC orders execute any portion that can be filled immediately and cancel the remainder. They allow partial execution while avoiding the risk of leaving resting orders in the book, making them useful in volatile market conditions.
3.3. Good-Till-Cancelled (GTC)
GTC orders remain active in the order book until fully executed or explicitly cancelled. They can only be applied to limit orders and ALO orders, as market orders require immediate execution. GTC orders are maintained across trading sessions and remain active when trading resumes.
3.4. Time Enforcement Instructions available on different order types
| FOK | IOC | GTC |
|---|
| Market Orders | X | X | |
| Limit Orders | X | X | X |
| ALO Orders | | | X |
4. Market-Close Trading Protocol
The Company operates continuous trading including overnight and on weekends, when some traditional markets are closed.
Definitions of market-close trading:
| Weekday Overnight Trading Hours | Weekend Trading Hours |
|---|
| Single stocks | When NYSE is closed between Monday morning and Friday afternoon ET.* | When NYSE is closed between Friday afternoon and Monday morning ET. |
| US equity indices | When CME is closed between Sunday evening and Friday afternoon ET* | When CME is closed between Friday afternoon and Sunday evening ET. |
| Commodities | When CME is closed between Sunday evening and Friday afternoon ET* | When CME is closed between Friday afternoon and Sunday evening ET |
| FX | N/A (FX markets are open 24/5) | 10pm Friday to 10pm Sunday UTC |
| MAX POSITION PERCENTAGE | 50 | 10 |
During market-close trading hours, the exchange enforces a maximum position size which is equal to the Max Position Percentage of the maximum position size enforced during market-open (see Trading and Margin Policy Section 4). This limitation applies to the net position size for each participant in each instrument.
When a participant’s position exceeds max position size during market-close trading hours, the system only allows risk-reducing trades that decrease the absolute size of the participant’s net position on a symbol. For long positions exceeding the limit, only sell orders are accepted; for short positions exceeding the limit, only buy orders are accepted. This ensures participants can manage risk exposure while preventing further position concentration during lower liquidity periods.
Market-close trading is also subject to more stringent price band limits (see section 5 below).
It should be noted that US bank holidays are treated like normal business days for the purposes of the market-close methodology.
5. Price Band Methodology
The Company implements price bands to protect users against
- their own fat finger errors
- manipulative practices from other market participants.
For all products, buy orders at a price greater than the upper band, and sell orders at a price less than the lower band, are rejected by the system before reaching the matching engine. The bands are set by taking a fixed percentage above and below the mark price of the product, set every hour. The percentages are as follows:
- US equities: 25%
- US equity indices: 10%
- Commodities: 10%
- FX: 5%
Price bands may be relaxed at the discretion of the CEO or COO for the following reasons:
- Exceptional market volatility
- Stock splits or reverse stock split of equities
6. Connectivity
The exchange code is written primarily in Rust and runs on Amazon Web Services hosted in ap-northeast-1 (Tokyo). Both market data and order entry access is via GUI and API (websockets), with equal access on all terms for all clients. For further information, please see docs.qfex.com
7. Speed Bump Implementation
The Company implements a 50-millisecond speed bump on all limit orders to protect against latency arbitrage and create a level playing field for all participants. When a limit order is received, it is held in a queue before being sent to the order book. This delay applies uniformly regardless of the participant’s technological sophistication or network connectivity.
The speed bump applies to all limit orders including new submissions and modifications, but not to any other request. This implementation reduces advantages gained through technological superiority alone and encourages broader market participation, typically leading to improved liquidity and more efficient price discovery. It is in line with standard industry practice to create a fair market place, and encourage the provision of liquidity.
8. Fees
The Company uses a maker-taker fee model for determining its trading fees. Orders that provide liquidity (maker orders) are charged different fees than orders that take liquidity (taker orders). Fees are calculated:
- based on the current pricing tier that the client is in when the order is placed;
- based upon total USD trading volume over the trailing 30 day period;
- pricing tiers are recalculated daily.
There are five tiers of fees, based on your Effective Volume for a trailing 30-day period traded on the platform. Effective Volume is calculated as follows:
Effective Volume = 1×FX + 2×Commodities + 2×Indices + 5×Single stocks
Where:
- FX = volume traded on FX futures (eg EUR/USD)
- Commodities = volume traded on commodities futures (eg Gold)
- Indices = volume traded on equity indices futures (eg NASDAQ-100)
- Single stocks = volume traded on single stock futures (eg PLTR)
| Taker fees (bps) / Tier | Effective Volume (volume traded on the platform in last 30 days) | FX | Commodities | Indices | Single stocks |
|---|
| Tier 5 | <2m$ | 4 | 10 | 10 | 20 |
| Tier 4 | 2m$ - 10m$ | 3 | 8 | 8 | 16 |
| Tier 3 | 10m$ - 100m$ | 2 | 4 | 4 | 10 |
| Tier 2 | 100m$ - 400m$ | 1 | 2 | 2 | 4 |
| Tier 1 | 400m$ + | 0.5 | 1 | 1 | 2 |
| Maker fees (bps) / Tier | Effective Volume (volume traded on the platform in last 30 days) | FX | Commodities | Indices | Single stocks |
|---|
| Tier 5 | <2m$ | 2 | 4 | 4 | 10 |
| Tier 4 | 2m$ - 10m$ | 1.5 | 3 | 3 | 8 |
| Tier 3 | 10m$ - 100m$ | 1 | 2 | 2 | 5 |
| Tier 2 | 100m$ - 400m$ | 0.5 | 1 | 1 | 2 |
| Tier 1 | 400m$ + | 0 | 0 | 0 | 0 |
8.1 Liquidation fees
Commission charged on trades executed as a result of a position being auto-liquidated, in accordance with section 6.3 of the Trading Policy, are set at double the relevant Tier 5 taker fees. Effective volume is not considered when a position is being auto-liquidated.
9. Risk Constants
9.1 Maximum Leverages
| Asset Class | Maximum Leverage |
|---|
| Currency Pairs (FX) | 50:1 |
| Gold & Major Indices | 30:1 |
| Commodities (excl. Gold) | 20:1 |
| Individual Equities | 10:1 |
These limits translate to specific margin percentages required to open and maintain positions. For example, a 50x leverage means a client must hold at least 2% of the position’s value as IM.
9.2 Maximum Position Sizes
| Asset Class | Maximum Position Size |
|---|
| FX (50x leverage) | $50,000,000 |
| Indices & Gold (30x leverage) | $10,000,000 |
| Commodities excl. Gold (20x leverage) | $5,000,000 |
| Individual Equities (10x leverage) | $2,500,000 |
9.3 Liquidation Bands
| Liquidation Band (Individual Equities) | Liquidation Band (Commodities excl. gold) | Liquidation Band (Gold & Major Indices) | Liquidation Band (FX) |
|---|
| Market Open | 0.75% | 0.5% | 0.25% | 0.1% |
| Weekday Overnight Trading | 1% | 0.75% | 0.5% | - |
| Weekend Trading | 2.5% | 2% | 1.5% | 0.75% |
9.4 Orderbook Liquidation Limits (USD)
| Liquidation Band (Individual Equities) | Liquidation Band (Commodities excl. gold) | Liquidation Band (Gold & Major Indices) | Liquidation Band (FX) |
|---|
| Market Open | 100,000 | 200,000 | 400,000 | 4,000,000 |
| Weekday Overnight Trading | 50,000 | 100,000 | 200,000 | - |
| Weekend Trading | 10,000 | 20,000 | 40,000 | 400,000 |
9.5 Minimum Liquidation Spread (USD)
5 basis points
10. Participant Responsibilities
All participants are responsible for ensuring their orders are appropriate and comply with exchange rules and regulations. Participants must comply with all exchange rules and procedures, with violations potentially resulting in disciplinary action including warnings or suspension of trading privileges.
