Discovery Bound

How Discovery Bounds Work

Discovery Bounds are leverage based limits that restrict how far the mark price may deviate from the external oracle price. Their purpose is to prevent price movements that exceed what may reasonably constitute true price discovery. These bounds are designed to provide clearly defined price levels within which market makers and other market participants can confidently participate, without risk of liquidation resulting from low liquidity or manipulation.

Bound Range

The mark price is restricted to move within 1 / max leverage of the last externally derived oracle price. Discovery Bounds are enforced 24/7, but are particularly relevant during internal pricing sessions (e.g., weekends or holidays), in which the external reference price may remain unchanged for extended periods. Market participants can use this information to manage their risk and margin accordingly.

Market	Max Leverage	Bound Range
XYZ100	25x	±4%
Gold, Silver, Oil (CL)	20x	±5%
Single Name Equities	10x	±10%
FX (EUR, JPY)	50x	±2%

Example

If the Silver oracle price is $75 at Friday’s 17:00 ET close, given 20× max leverage, the applicable Discovery Bound is ±5%. As a result, both the mark price and oracle price are restricted to the range $71.25 – $78.75 until external pricing resumes on Sunday at 18:00 ET.

If Silver is trading 8% above Friday’s close and a trader believes the move does not reflect fair value, they may enter a short position with confidence that the position will be rewarded if that view is validated once external pricing resumes. Importantly, if a trader’s liquidation price lies outside the active price bounds, their position cannot be liquidated while those bounds are in effect.