Pre-IPO Stock Perpetuals

QFEX may list perpetual futures referencing private companies before their initial public offering (IPO). These contracts let traders take a view on a company’s implied equity valuation before a public share price exists. A pre-IPO stock perpetual is a derivative. It does not represent ownership of the underlying company and does not provide shares, voting rights, dividends, IPO allocations, or any other shareholder rights.

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At a Glance

• Pre-IPO stock perpetuals trade 24 hours a day, 7 days a week.
• Funding is calculated and settled every 60 minutes, including nights and weekends.
• The corresponding Binance pre-IPO perpetual Mark Price is used as the oracle.
• The initial Reference Share Count is 1,000,000,000 shares.
• A stock-split-style adjustment is made only when an updated share count differs from the current Reference Share Count by more than 3%.
• Any adjustment changes price and position quantity in opposite directions so that position notional and PnL are not changed merely by the revised share count.

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Pricing Convention

Before the IPO, one contract is priced as a per-share equivalent based on a Reference Share Count of: $$S_{\text{ref}} = 1{,}000{,}000{,}000$$ If $V_t$ is the company’s implied equity valuation, the per-share-equivalent price is: $$P_t = \frac{V_t}{S_{\text{ref}}}$$ Equivalently, the valuation implied by the contract price is: $$V_t = P_t \times S_{\text{ref}}$$ For example, a contract price of $200** implies an equity valuation of **$200 billion under the one-billion-share convention. The Reference Share Count is a contract-pricing convention. It is not a representation or guarantee of the number of shares that the company will actually have at IPO, its IPO valuation, or its eventual public trading price.

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Oracle and Funding

For each QFEX pre-IPO stock perpetual, the oracle price is the Mark Price of the corresponding Binance pre-IPO perpetual: $$P_t^{\text{oracle}} = P_t^{\text{Binance Mark}}$$ The Binance Mark Price is used as the external reference price for QFEX’s Mark Price, funding, margin, and liquidation calculations. It is distinct from the last traded price on QFEX. Pre-IPO stock perpetuals have continuous market_hours, so funding remains active 24/7. Funding is calculated and settled every 60 minutes using the standard QFEX Funding methodology, with the Binance Mark Price serving as the oracle input.

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Share-Count Adjustments

When QFEX adopts an updated share count, it compares that number with the contract’s current Reference Share Count. Let:

• $S_{\text{old}}$ be the current Reference Share Count.
• $S_{\text{new}}$ be the updated Reference Share Count.

A stock-split-style adjustment occurs only if: $$\left|\frac{S_{\text{new}}}{S_{\text{old}}} - 1\right| > 3\%$$ For the initial one-billion-share convention, no adjustment is made when the updated share count is between 970,000,000 and 1,030,000,000 shares, inclusive. QFEX will announce the updated Reference Share Count and the effective time of any adjustment. The updated count may be informed by official IPO filings and changes to the corresponding Binance contract specification.

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Adjustment Method

Define the adjustment ratio as: $$R = \frac{S_{\text{new}}}{S_{\text{old}}}$$ At the effective time: $$Q_{\text{new}} = Q_{\text{old}} \times R$$ $$P_{\text{new}} = \frac{P_{\text{old}}}{R}$$ Entry prices and other per-contract price values are adjusted by the same price factor. This preserves position notional: $$Q_{\text{new}} \times P_{\text{new}} = Q_{\text{old}} \times P_{\text{old}}$$ It also preserves unrealized PnL immediately across the adjustment, apart from immaterial rounding differences.

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Example: Share Count Increases

Assume the Reference Share Count changes from 1.0 billion to 1.25 billion shares. The adjustment ratio is: $$R = \frac{1.25}{1.00} = 1.25$$ A position of 100 contracts with an entry price of $180** and a Mark Price of **$200 becomes:

• 125 contracts;
• an adjusted entry price of $144; and
• an adjusted Mark Price of $160.

Before the adjustment, the position notional is $20,000 and unrealized PnL is$2,000. Immediately after the adjustment, both amounts remain the same. If the Reference Share Count decreases, the process operates in reverse: position quantity decreases while per-contract prices increase proportionally. This treatment follows the economic logic of a stock split or reverse stock split. See Corporate Actions for the general QFEX approach to split-style adjustments.

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IPO and Oracle Risk

Pre-IPO companies may change their capital structure, delay or cancel an IPO, or list with a valuation materially different from the valuation implied by the contract. The Binance Mark Price may also differ significantly from the eventual public share price. QFEX will announce separately any post-IPO transition, oracle change, contract adjustment, suspension, or delisting. Traders should not assume that a pre-IPO contract will automatically convert into a standard stock perpetual on unchanged terms.