Insurance Funds

Definition

An insurance fund is a pooled amount of money that an exchange maintains in the event that there is a mismatch between the closing price of a leveraged position and the bankruptcy price of the same position. The funds are used to make up the difference to the side of the position who would have otherwise suffered due to the price discrepancy.


Details

To better illustrate this, let’s look at an example. Trader A opens a position with a bankruptcy price (the price at which point the position is worthless to trader A) of $7500 while trader B is on the other side of the position. Long or short doesn’t matter here since we’re just going to focus on the $’s. If the market moved against trader A and the position hit the liquidation price (the price where the exchange will begin to close the position) but due to an illiquid market the actual closing price (the price where the exchange actually closed the position) was $7475, this would represent a loss of $25 to trader B. Since this is unfair to trader B, the insurance fund makes up the missing $25. More simply, the insurance fund is the ‘gap’ insurance for the counterparties of a position when an illiquid market causes a mismatch in price and expected price.


API Endpoints

Futures

/market/futures/insurance-fund/information
/market/futures/insurance-fund/{instrument}

Swaps

/market/swaps/insurance-fund/information
/market/swaps/insurance-fund/{instrument}/latest
/market/swaps/insurance-fund/{instrument}/historical


Availability

Our Insurance Funds endpoints are available via REST API for latest and historical (time series) data as well as WebSockets for real-time data.

This table outlines how far back our Insurance Funds data goes across the different exchanges within the Futures and Swaps markets:

ExchangeFutures Market Start Date*Swaps Market Start Date*
Huobi2020-08-062020-07-31

*These dates represent the oldest start date we have for Insurance Fund data across all contracts


Frequently Asked Questions

Is the amount of the fund for each asset in USD or units of the asset?

  • The query parameter called 'fund' shows the number of units of that asset in the fund. For example, the BTC fund shows 2510.3140881325317 as of 8/31/22. This means there are 2510.xxx BTC in the fund.