Changes to pre-IPO futures expiration dates

After trading in pre-IPO futures on the UTEX exchange went live, we have been receiving many requests from our users to change the trading rules. When buying a futures contract, you would like an opportunity to make money by exploiting the differences in prices between the stock prices at IPO and on the first trading day on the public market.

To meet our users’ needs, we have moved the expiration date of futures contracts in the event of a company’s IPO or direct listing to the 200th day of the offering. On the expiration day, all futures in user accounts will be sold at the stock price at the opening of the current trading day.

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Important details

• If your strategy is based on the previous rules, don't worry: the market maker will buy back your positions at the offering price, if necessary. All you have to do is to submit a sell order on the offering day and at the offering price, and we will execute it. This is true for futures that went into trading before the expiration rules changed.
• For the next 200 days after a company gets listed on a stock exchange, you can trade in futures as before the offering. You can open and close positions at any time.
• After the company’s listing, UTEX futures prices of this company's stocks may differ from the prices at the exchange where the offering occurred. This will create arbitrage opportunities for UTEX trading participants, and we encourage you to take advantage of these opportunities. In this way you will make money and increase trading liquidity.
• On our part, we promise to include active market makers and arbitrage traders in trading within a few months, if organic liquidity (created by traders’ activity) is not sufficient.
• In the future, we plan to completely move away from futures expiration so that trading continues indefinitely.