Cryptocurrency contract trading platform developed and launched by KuCoin in July, KuMEX has officially launched Bitcoin Quarterly Futures Contracts, reports Finance Magnates.

The launch was disclosed on Thursday, October 31, 2019, and the contracts are described as being distinct from typical contracts, namely, including an expiry date and settlements achieved based on a “prespecified rule.”

Here’s what we know so far as to how KuMEX contracts will work:

The delivery date is set for the last Friday of the contract month

Settlement of price is set at a 30-minute time-weighted average price (TWAP)

Quarterly contracts will be listed for two consecutive years

The reason for going with TWAP for settlements appears to rest in the fact that it is calculated based on time, requires simpler calculations and is not impacted by small volume trades.

Here’s an extract of the announcement made, which gives an example of the entirety of said futures contracts:

“If today is May 1, then the contract month will be June and September. Traders can identify the contract month according to the contract ticker. For example, the ticker for a Bitcoin contract to settle in December 2019 is XBTZ19.”

As per the news outlet, KuMEX utilizes a volume-weighted average price (VWAP) as well, but for offering accurate prices of the Bitcoin Spot Index. This is done by taking into account Bitcoin prices of crypto exchanges including Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex.

#KuMEX 24h volume surged almost 5 times 😱 while it handles pretty well! What do you think about the #BTC 🚀 today? CHINA EFFECT? pic.twitter.com/6kQ1QqVZcv — Michael Gan (@gan_chun) October 26, 2019