Price Lock

Overview

What does Price Lock mean?

Price Lock is a commitment or system control that holds a specified price for a defined item, asset amount, order, or period despite market movement.

How it works in practice

A price lock holds a specified exchange rate or payable amount for a defined period under disclosed conditions. A merchant may quote a $100 item as 0.0012 BTC for 10 minutes and agree to accept that BTC quantity if the invoice is funded within the valid window. The service must store the exact rate, source, precision, asset, quote timestamp and expiry. The lock should say whether it concerns payment initiation, detection or confirmation because blockchain inclusion may occur after the customer's transfer was submitted.

Further operational details

Operationally, payment and trading systems use price locks to give a customer or operator a predictable amount while authorization, payment, signing, or settlement is completed. The result should be interpreted through the fact that the lock should identify the subject, quantity, currency or asset, price, fees, validity period, permitted variance, payment conditions, and treatment after expiry.

It is broader than an exchange rate lock because it may apply to a product price, token amount, conversion quote, invoice, or service rather than only a currency pair.

Limits and common misunderstandings

A price lock is not an assurance against every network delay or slippage event. If payment comes after expiry, the merchant needs a late-payment policy, not an unrecorded manual rate change.

Related glossary terms

Exchange Rate Lock; Market Price; Available Liquidity