If you use bStocks as collateral, you’ll need to keep an eye on your account over the weekend too. Even after traditional stock markets close, collateral valuations can still change—you can no longer treat market closures as a pause in risk.
Binance’s announcement states that, starting at 08:00 Beijing time on October 24, bStocks collateral index prices will be updated dynamically around the clock. During non-trading hours, prices will be calculated with reference to Binance order book prices, subject to a dedicated price movement limit.
One thing that’s easy to overlook is the direct impact this can have on margin levels. Even when the underlying stock market is closed, your account’s margin indicators may change. And a limit on index movements doesn’t mean collateral value is fixed.
In my view, continuous valuation helps address the problem of prices being stuck at an outdated point in time. But anyone borrowing against bStocks needs to rethink their weekend margin buffer. Stock markets have business hours; collateral accounts don’t get weekends off.
#BStocks
Binance’s announcement states that, starting at 08:00 Beijing time on October 24, bStocks collateral index prices will be updated dynamically around the clock. During non-trading hours, prices will be calculated with reference to Binance order book prices, subject to a dedicated price movement limit.
One thing that’s easy to overlook is the direct impact this can have on margin levels. Even when the underlying stock market is closed, your account’s margin indicators may change. And a limit on index movements doesn’t mean collateral value is fixed.
In my view, continuous valuation helps address the problem of prices being stuck at an outdated point in time. But anyone borrowing against bStocks needs to rethink their weekend margin buffer. Stock markets have business hours; collateral accounts don’t get weekends off.
#BStocks