Understanding Margin Trading in Crypto
Margin trading, also known as leveraged trading, allows traders to borrow funds from a platform to amplify their trading positions. This enables them to potentially earn higher profits from price differences while using their own capital as collateral.
Currently, OKX supports up to 10x leverage on certain crypto pairs, meaning traders can magnify gains (or losses) tenfold. Proper risk management is crucial when using leverage, as losses are equally amplified.
Key Applications of Margin Trading
1. Long Positions (Bullish Strategy)
When anticipating a price increase:
- Use your capital as margin to borrow additional funds.
- Buy the cryptocurrency at current prices.
- Sell when prices rise to repay the loan with interest.
- Keep the remaining profit.
2. Short Positions (Bearish Strategy)
When expecting a price decline:
- Borrow the cryptocurrency and sell it immediately.
- Repurchase it at lower prices to repay the loan.
- Profit from the price difference.
3. Simplified Process with Unified Accounts
OKX's unified account system streamlines margin trading into two steps:
- Open position (Buy/Sell)
- Close position (Liquidation)
Step-by-Step Margin Trading Guide
1. Account Setup
A. Enable Margin Trading Mode
Existing users must configure their account under Trading Settings:
- Select Account Mode (Single-currency, Cross-currency, or Portfolio Margin).
- Review details of each margin mode before activation.
B. Transfer Funds to Trading Account
Deposit collateral via these methods:
- Method 1: Navigate to Assets → Funds Transfer
- Method 2: Click Transfer within the margin trading interface
👉 Get started with margin trading
2. Executing Trades
Opening a Long Position (Example: ETH/USDT)
- Select Buy on the ETH/USDT trading pair.
- Choose position type (Isolated/Cross Margin).
- Set order type, leverage (up to 10x), and amount.
- Click Buy ETH to execute.
Opening a Short Position (Example: ETH/USDT)
- Select Sell on the ETH/USDT pair.
- Specify ETH as collateral currency.
- Enter desired price and amount.
- Click Sell ETH to confirm.
Important Considerations
Interest Rates & Repayment
- Calculation: Hourly based on your user tier and borrowed asset.
- Repayment: Automatic upon position closure in single-currency mode. Manual repayment required for cross-currency liabilities.
Risk Management
- Warning Trigger: When Margin Ratio ≤ 300%
- Liquidation: Occurs at Margin Ratio ≤ 100%
👉 Master advanced risk controls
FAQ Section
Q1: What's the maximum leverage OKX offers?
A: Currently up to 10x for select crypto pairs.
Q2: Can I trade margin without collateral?
A: In cross-currency mode with auto-borrow enabled, yes. Otherwise, collateral is required.
Q3: How often is interest charged?
A: Interest compounds hourly, deducted from your account each hour.
Q4: What happens during liquidation?
A: Positions automatically close when your margin ratio drops below 100% to prevent further losses.
Q5: Are there fees for borrowing?
A: Yes, rates vary by cryptocurrency. Refer to OKX's leverage interest table.
Disclaimer: This content is for educational purposes only. Cryptocurrency trading involves substantial risk. OKX does not provide investment advice.