About this notice
This notice is for professional clients and eligible counterparties. It does not describe every risk. Compute Markets contracts are not yet available, and the terms on this website are indicative and may change before launch.
Leverage and losses
Futures are leveraged. A small move in the futures price can cause a loss that is large compared with the margin posted, and losses can exceed that margin. You may have to provide extra margin at short notice, including during the trading day. If you do not, your positions may be closed out at a loss.
Funding payments
Timed perpetual futures carry a daily funding payment based on the difference between the futures price and the Compute Desk index. You may pay or receive funding; the amount and direction can change daily and can add up to a material amount over time. A timed perpetual tracks the current index level. It does not fix a price for a future date.
Index and basis risk
Prices, funding and final settlement depend on indices calculated by third parties: Compute Desk and, for DESKH100, General Index. GPU rental markets are young and less transparent than established commodity markets. Index values may rest on limited data and may be revised, delayed, miscalculated or discontinued, and the methodology may change.
DESKH100 is calculated by General Index under the IOSCO Principles, and Compute Desk states that the UK Benchmarks Regulation and IOSCO statements for that series apply to it. DESKH200, DESKB200 and DESKB300 are calculated and published by Compute Desk and are not currently covered by those statements. [Benchmark status, including under the EU Benchmarks Regulation, to be confirmed with Compute Desk and counsel.]
The indices are smoothed: each published value combines the current assessment with the previous value, so the indices may lag changes in market prices, and funding may stay in one direction for long periods. The indices are published on US business days, which may not match the venue’s business days.
The indices reflect US one-year reserved rental prices and may differ from the prices you actually pay or receive for compute, including for one-month deliveries and for delivery outside the United States.
Contracts are denominated and settled in US dollars. Firms with another base currency bear exchange-rate risk.
Liquidity risk
This is a new market. There may be few participants, wide bid–ask spreads and little depth, and you may not be able to open or close positions when you want or at the price you want. Trading may be halted or suspended.
Market risk
GPU rental prices can move sharply because of new hardware generations, supply-chain disruption, changes in demand, energy costs or export controls. Older GPU models may lose value quickly.
Physical delivery risk
For physically delivered contracts, delivery depends on the delivering member, data centres, power, networks and hardware, and on verification by Compute Desk COMPUTE Clear. Delivery may be delayed, partial or fail, and remedies under the Rulebook may not fully compensate you. Nominations may not be matched, and you may pay a deferral fee.
Clearing, settlement and counterparty risk
[Describe once the clearing and settlement arrangement is confirmed.]
Operational and technology risk
System failures, cyber incidents or errors at the venue, members, the index provider or the settlement agent may cause losses.
Conflicts of interest
Compute Desk acts as index provider and as physical settlement agent. [Summarise how conflicts are identified and managed.]
Legal, regulatory and tax risk
Regulatory approval may be refused or granted on different terms. The regulatory classification and tax treatment of compute derivatives may be uncertain and may change. Position limits, position reporting, transaction reporting and other obligations may apply to you. Firms that are not authorised under MiFID II should take their own advice on whether they need authorisation or can rely on an exemption.
No advice
Nothing on this website is investment, legal, tax or accounting advice. Decide for yourself whether these products suit your firm, and take independent advice.