At Coinmerce, we are dedicated to providing a transparent and equitable trading experience.
This document outlines how we calculate the prices you see when you trade cryptocurrencies on Coinmerce. Our goal is to offer pricing that is fair, transparent, and competitive, while effectively managing the costs and risks involved in providing our Exchange Services.
How do we determine our Pricing?
The price you're offered is calculated using a simple, two-step process. In the third step we add our Exchange Fee and provide you our Exchange Offer.
Step 1: Finding the Base Market Price (BMP)
First, we establish a Base Market Price (BMP), which is a non-executable estimate of a crypto asset's market value at any given moment. To determine this, we:
Gather data from Exchanges: We collect price data from leading international cryptocurrency trading platforms. This gives us a comprehensive view of the market.
Consider order book and trade data: We consider both the prices people are willing to buy and sell at and the prices of recent, actual trades. The actual traded price represents the value of a crypto-asset far better than order book quotes, which can be easily withdrawn.
Prioritize important information: We give more weight to information from exchanges with higher trading volume and from recent, larger trades to get the most accurate and up-to-date price data. We apply a logical weighting scheme to refine the aggregated data into a final figure.
Step 2: Risk Adjustment
To ensure fair and sustainable pricing, we derive and add a risk adjustment to the Base Market Price. To calculate this adjustment, we request real-time price quotes from multiple professional market participants, known as liquidity providers. We compare these quotes to the Base Market Price to determine the premium applied by each provider. We then use a sophisticated calculation method, called a Kalman filter, to smooth out any short-term market noise and arrive at a stable, reliable risk adjustment. The final, filtered premium is added to the Base Market Price to produce an objective, risk-adjusted price. This process ensures that the price we determine is representative of the specifics of your Order (such as the type and volume of your order) and market conditions.
Step 3: Exchange Offer and Fee
The final price, which we call the Exchange Offer, is presented to you with a validity window of two minutes. This Exchange Offer includes the price determined in Step 2 and the Exchange Fee, which is separately disclosed for full transparency. If you accept the Exchange Offer within the validity window, the Order is deemed final and executed at that locked-in rate.
Our Exchange Fee
We charge a transparent exchange fee of 0.25% for every trade. These fees help us cover the costs of providing a secure and reliable exchange service. We kindly refer to the Fee Schedule for comprehensive and up-to-date information on costs and fees.
Example:
You want to buy 1 ETH with your Euro Balance.How is the price constructed?
Step 1: We calculate a Base Market Price (BMP) of €2,000 per ETH
Step 2: We derive a market-representative risk adjustment of 0.12%,
and add this to the BMP. This adds €2.40 (€2,000 * 0.0012).
The risk-adjusted price is €2,002.40.
Step 3: We apply a transparent Exchange Fee of 0.25%.
This adds €5.01 (€2,002.40 * 0.0025).
The final Exchange Offer presented to you is €2,007.41 for 1 ETH. The offer will remain valid for two minutes.
Spot Margin Liquidation Pricing
Liquidation of a Margin Position is triggered when the Position Risk Ratio of the Margin Position reaches the liquidation threshold. This threshold is derived from an analysis of historical market movements and the capturing of asset-specific volatility patterns.
When a liquidation is triggered, the transaction is initiated against the then-current Base Market Price (BMP). To account for potential price movements, slippage, and other execution risks during the execution window between trigger and settlement, an asset-specific risk adjustment of 10 to 50 basis points (0.10% to 0.50%) is applied to the Base Market Price. This adjustment is calibrated on the basis of observed historical price behaviour and the liquidity profile of the respective asset. In periods of heightened volatility or reduced liquidity for a specific asset, Coinmerce reserves the right to temporarily increase the risk adjustment to up to 100 basis points (1.00%) based on objectively observed market conditions, including volatility and liquidity constraints.
Example:
Your short position of 0.2 BTC is liquidated.
(Context: You provided €10,000 in Initial Margin and borrowed 0.2 BTC, selling it at €50,000 per BTC. The €10,000 proceeds were added to your account, making your total Margin Collateral €20,000. Your obligation is to return 0.2 BTC. The price of BTC has now increased to €95,000, triggering a forced liquidation to buy back the 0.2 BTC before your collateral is fully depleted).
How is the execution price constructed?
Step 1: We calculate a Base Market Price (BMP) of €95,000 per BTC.
Step 2: We calculate a market-representative risk adjustment of 20 basis points (0.20%) and add this to the BMP. This adds €190 (€95,000 * 0.0020). The risk-adjusted execution price is €95,190 per BTC.
Final Execution: The final execution price used to buy back the BTC is €95,190 per BTC. To buy back your borrowed 0.2 BTC, a total of €19,038 (€95,190 * 0.2) is deducted from your €20,000 Margin Collateral. (Note: Separate liquidation fees apply and are detailed in the Fee Schedule).
General Provision on Fees and Pricing Adjustments
Coinmerce reserves the right, at its sole discretion, to reduce or waive any fee, premium, or risk adjustment described in this document, in whole or in part, for any reason — including, but not limited to, promotional campaigns, loyalty incentives, or proprietary inventory-management considerations. Any such reduction or waiver shall only result in pricing that is equal to or more favourable to the client compared to the standard pricing methodology described in this document. Coinmerce may modify or discontinue any such reduction or waiver at any time, upon which the standard pricing methodology shall apply.