Digital currency leverage trading has gained significant traction in recent years as investors seek higher returns in the volatile cryptocurrency market. Bitcoin, the pioneer cryptocurrency, remains a focal point for leveraged trades. But how exactly do you sell digital currency leverage? This guide provides a detailed tutorial on selling BTC leverage positions on OKX Exchange.
Understanding Digital Currency Leverage Trading
Leverage trading in cryptocurrencies allows traders to borrow funds to amplify their market positions. By using borrowed capital, traders can potentially magnify their profits (or losses) without committing the full value of the position. While some traders use leverage for short-selling ("going short"), the process of closing these positions often raises questions. Below, we break down the step-by-step process.
Step-by-Step Guide to Selling BTC Leverage on OKX
1. Register on OKX Exchange
👉 Sign up for OKX here using your mobile number to receive a welcome bonus. Email registration requires phone verification, so mobile registration is recommended.
2. Complete Verification
- Enter the OTP sent to your mobile (valid for 10 minutes).
- Select your country/region.
- Set a secure password.
- Navigate to "User Center" for identity verification (video verification must be done via the OKX app).
3. Access Leverage Trading
- Go to "Trading" > "Leverage" from the homepage.
- Search for BTC and select the BTC/USDT trading pair.
- Choose between "Cross Margin" or "Isolated Margin," along with USDT as collateral.
4. Execute Your Trade
- Select leverage multiplier (up to 10x).
- Choose "Limit Order," enter price/quantity, and click "Sell (Short) BTC."
- Confirm the transaction.
Key Concepts in Leverage Trading
Asset Management
- Total Account Balance: Combined value of all assets in your leverage account.
- Transferred Assets: Funds moved from your spot account to the leverage account.
- Borrowed Assets: Crypto borrowed using transferred assets as collateral.
Leverage Mechanics
- Maximum Borrowable Amount: Determined by your equity and platform limits (e.g., 3x leverage).
- Calculation:
Max Borrowable = (Equity - Outstanding Loans) × (Leverage Multiplier - 1) - Outstanding Loans
Risk Control
Risk Ratio: Critical metric to avoid liquidation.
- ≥150%: Safe to withdraw excess funds.
- ≤130%: Warning threshold.
- ≤110%: Automatic liquidation.
- Formula:
Risk Ratio = [(Collateral Value - Interest) / Market Price + (Trading Asset Value - Interest)] / (Borrowed Value / Market Price + Borrowed Assets) × 100%
Liquidation
- Triggered when Risk Ratio ≤110%.
- Liquidation Price:
(Borrowed Value × 110% + Interest - Collateral) / (Trading Asset Value - Interest - Borrowed Assets × 110%)
Interest & Repayment
- Interest accrues per loan and is charged every 24 hours.
- Repayments prioritize oldest loans, covering interest before principal.
FAQs
Q1: Is leverage trading riskier than spot trading?
A: Yes, leverage amplifies both gains and losses. A 10x position can liquidate quickly if the market moves against you.
Q2: Can I withdraw funds anytime with leverage positions open?
A: Only if your Risk Ratio stays above 150%. Otherwise, withdrawals are restricted.
Q3: How is interest calculated on borrowed assets?
A: Interest compounds every 24 hours based on the loan amount and platform rates.
Q4: What happens during liquidation?
A: The platform automatically sells your assets at market price to repay the loan and interest.
Q5: Does OKX support other leverage pairs besides BTC/USDT?
A: Yes, multiple trading pairs are available with varying leverage limits.
Q6: Can I adjust leverage after opening a position?
A: No, leverage must be set when initiating the trade and cannot be modified afterward.
Final Notes
Leverage trading in digital currencies offers high-reward opportunities but comes with equally high risks. Always:
- Conduct thorough research.
- Start with small positions.
- Use stop-loss orders.
- Monitor your Risk Ratio closely.
👉 Explore OKX’s leverage trading features to practice with demo accounts before committing real funds.
Disclaimer: Cryptocurrency trading involves significant risk. This guide is for educational purposes only and does not constitute financial advice.