Options Trading in Singapore, on OKX: What It Is, How It Works, and What to Know

Options are financial instruments that give you the right, but not the obligation to buy or sell crypto at a specific price before a set expiry date.

They’re powerful tools used by traders to:

• Hedge market risk

• Amplify profit potential

• Create structured strategies for volatile or sideways markets

With options, you can earn, protect, or speculate, all depending on how you structure your trade.

How Options Work

There are two types of options:

• Call Option: The right to buy an asset at a certain price

• Put Option: The right to sell an asset at a certain price

For example: If you buy a BTC call option with a strike price of $90,000, and BTC rises to $95,000, you can exercise or sell your option for a profit. If BTC stays below $90,000, the option expires worthless, but your loss is limited to the premium you paid.

Understanding margin and liquidation

How margin works for options

• Buyers pay a premium upfront to enter a position. This premium is your maximum possible loss — no additional margin is required, and your position cannot be liquidated.

• Sellers collect the premium but take on greater risk. Because your potential loss as a seller can exceed the premium received, OKX requires you to deposit margin as collateral. Only funds in your trading account can count as margin — assets held in your funding or Earn account cannot be used as collateral.

• Maintenance margin is the minimum amount you need as a seller to keep your position open. You can track your maintenance margin ratio (MMR) in the trading interface. If your MMR falls to 100% or below, liquidation is triggered.

What is liquidation?

If the market moves against your position as a seller and your MMR falls to 100% or below, OKX will automatically close part or all of your position. This happens at the prevailing market price, which means the final closing price may differ from what you expect.Liquidation can happen quickly in volatile markets. You will not receive a grace period. Option buyers are not subject to liquidation.

Managing your risk

• If selling options, set liquidation alerts to get notified when your MMR approaches 100%, and check your MMR regularly, especially in more volatile markets. This gives you time to add margin or reduce your position to avoid liquidation.

• Understand the premium you're paying or receiving. As a buyer, this is the most you can lose. As a seller, it's the most you can gain, while your potential loss may be significantly larger.

• Pay attention to expiry dates — options lose value as they approach expiry. Make sure your position reflects your intended time horizon.

Options trading carries significant risk, particularly for sellers. Trade carefully and consider your risk tolerance when sizing your positions.