What is margin in X-Perps trading?
1. Understanding margin
In the crypto X-Perps market, margin is a percentage of the value of the X-Perps contract that traders place in an account to open a position.
2. Calculating margin
OKX has two margin modes: selected and isolated.
Selected mode: In selected margin mode, the entire margin balance is shared among all open positions, which can help lower the risk of liquidation.
Margin requirement for positions
USD-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier × Mark price / LeverageThe initial margin fluctuates based on the mark price in selected margin mode.
Margin requirement for open orders and positions
One-way mode margin requirement
Long position: Max ((Position notional value + Buy order value), (Sell order value – Position notional value)) / Leverage
Short position: Max ((Buy order value – Position notional value), (Position notional value + Sell order value)) / Leverage
Hedge mode margin requirement = |Long position notional value + Open buy order value| / Leverage + |Short position notional value + Open sell order value| / Leverage
Isolated margin mode: In isolated margin mode, each position has its own margin, allowing traders to manage risk per position.
USD-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier × Average price of open positions / Leverage
3. Understanding margin and leverage
Leverage is a trading mechanism that amplifies potential returns and risks by allowing traders to trade with more funds than what they have in their trading account. In selected margin mode, when you are opening long or short positions: Initial margin = Position value / Leverage
USD-margined contracts
If the current BTC price is 10,000 USDC, the user wants to buy X-Perps worth 1 BTC with 10x leverage, Number of Contracts = BTC Quantity / Contract Size = 1 / 0.0001 = 10,000 contracts.
Initial Margin = Contract Size x Number of Contracts x BTC Price / Leverage) = 0.0001 x 10,000 x 10,000 / 10 = 1,000 USDC
4. Margin requirements
Initial margin rate: 1 / Leverage
Maintenance margin: The minimum margin required to sustain the current position.
Spot and X-Perps selected margin mode
Maintenance margin ratio = (Balance of an asset in spot and X-Perps selected margin account + PnL in selected margin positions – Amount in open sell orders – Amount required for open orders in isolated margin mode – Order fees) / (Maintenance margin + Liquidation fees)Multi-currency margin mode
Maintenance margin ratio = Adjusted equity / (Maintenance margin + Liquidation fees)Spot and multi-currency margin mode - isolated margin mode
USD-margined contracts
Maintenance margin ratio = (Margin balance + PnL in isolated margin position) / (Maintenance margin + Liquidation fees)
5. Managing margin calls
Margin calls are unique to isolated margin mode. You can increase the margin of specific positions to better control your risks.
6. Adjusting leverage
OKX supports adjusting the leverage of your open positions.You can only increase your leverage if the modified leverage is lower than the maximum leverage allowed for your current position. Once you’ve increased your leverage, the margin required to sustain your current position will be reduced.You can only decrease your leverage if you have enough funds in your trading account to cover the increased margin requirement with the modified leverage.
7. X-Perps order loss
In X-Perps trading, when the order price deviates from the mark price, the system will calculate order loss. For example, when your buy order price is higher than the mark price or your sell order price is lower than the mark price, an unrealised loss will occur if the order is executed. To protect your assets and ensure platform safety, OKX includes order loss as a part of the cost required to open a position to prevent liquidation.
USD-margined contracts
Buy order loss: Abs (Contract size × |Number of contracts| × Multiplier × Min [0, (Mark price – Order price)])
Sell Order loss: Sell order loss: Abs (Contract size × |Number of contracts| × Multiplier × Min [0, (Order price – Mark price)])
For market orders, the platform uses an estimated fill price as the order price.
Disclaimer:
This content is provided for informational purposes only and may cover products that are not available in your region. It does not constitute investment or financial product advice, not it is a recommendation or solicitation to buy or sell financial instruments or to engage in any specific trading strategy.
Trading in financial instruments involves a significant risk of loss and may not be suitable for all investors. If you invest in X-Perps or other derivatives you may lose some or all of the money you invest. X-Perps are leveraged instruments; leverage can amplify both gains and losses. The value of investments and any income derived from them can go down as well as up, and you may not recover the amount originally invested. Past performance is not a reliable indicator of future results. You should carefully consider your investment objectives, level of experience, and risk appetite before engaging in any trading activity.
OKX Europe Markets Ltd ("OEM"), which is authorised and regulated by the Malta Financial Services Authority (MFSA) under the Investment Services Act (Chapter 370 of the Laws of Malta) as a Investment Services Licence Holder (Licence No. OEML-15905).
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