What is the margin system of OKEx's perpetual contracts?

In OKEx's perpetual contracts system, margin acts as a safety net to reduce counterparty risk and ensure traders have sufficient funds to cover potential losses.

Oct 25, 2024 at 05:37 am

Understanding the Margin System of OKEx's Perpetual Contracts

1. Concept of Margin

In perpetual contracts trading, margin refers to a collateral deposited to provide liquidity and reduce counterparty risk. It acts as a safety net, ensuring that traders have sufficient funds to cover potential losses.

2. Margin Ratio

The margin ratio is the ratio of the margin to the face value of the contract. It determines the leverage available to traders. Higher margin ratios imply lower leverage and vice versa.

3. OKEx's Margin System

OKEx employs a cross-margin system for its perpetual contracts. This means that all perpetual contract positions share the same margin pool.

4. Types of Margins

Maintenance Margin: The minimum margin required to keep an open position. If the margin balance falls below this level, a margin call is triggered.
Initial Margin: The margin required to open a new position. It is typically higher than the maintenance margin.

5. Margin Call

When the margin balance falls below the maintenance margin, a margin call is issued. Traders have a limited time to deposit additional funds or close positions to meet the margin requirements.

6. Liquidation

If traders fail to resolve a margin call, their positions may be liquidated forcibly. OKEx uses a three-level liquidation mechanism:

Partial Liquidation: Sell or buy a portion of the position to cover the deficit.
Smart Liquidation: Liquidate positions based on market depth and avoids market impact.
Full Liquidation: Close all open positions and settle the outstanding balance.

7. Auto-Deleveraging

In periods of high volatility, OKEx triggers auto-deleveraging. This reduces overall market leverage by liquidating positions with insufficient margin.

8. Key Features of OKEx's Margin System

Dynamic Margin Ratio: The margin ratio is adjusted based on market volatility.
Loss Protection: Traders can activate stop-loss orders to prevent excessive losses.
Margin Transfer: Traders can transfer margin between different perpetual contract markets.

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research！

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

Fear & Greed Index

Trade Now

Biggest Gainers

AIC

$0.3576

59.66%

Trade Now
BTG

$9.3594

55.69%

Trade Now
USUAL

$0.4041

29.23%

Trade Now
JASMY

$0.0325

27.87%

Trade Now
DEXE

$20.6826

23.80%

Trade Now
ACH

$0.0463

22.21%

Trade Now

Latest Crypto News

El Salvador Removes Bitcoin's Legal Tender Status, Citing IMF Agreement
2025-01-31 10:45:53
Solana (SOL) Price Rises 21% in a Week, Nearing $300
2025-01-31 10:45:53
Texas Builds On Crypto-Friendly Foundation to Establish Bitcoin Reserve
2025-01-31 10:35:54
Discover the Next Crypto Sensation: ICOs You Can’t Afford to Miss!
2025-01-31 10:35:54
HYPE Is Poised for a Breakout as February Begins, Targeting a 50% Surge
2025-01-31 10:35:54
The SEC Approves the Bitwise Bitcoin and Ethereum ETF
2025-01-31 10:35:54

Related knowledge

What are the impacts of different contract leverage multiples?

Dec 16,2024 at 12:46pm

Impacts of Different Contract Leverage MultiplesLeverage, a tool leveraged in the financial realm, amplifies trading activities and enhances potential returns while simultaneously magnifying risks. Understanding the implications of varying leverage multiples is paramount for savvy traders. This article delves into the impacts of different contract lever...

Which is more suitable for novices, contract trading or margin trading on Huobi.com?

Dec 16,2024 at 12:44pm

Which is More Suitable for Novices: Contract Trading or Margin Trading on Huobi.com?As a novice trader venturing into the world of cryptocurrency trading, the choice between contract trading and margin trading on Huobi.com can be a daunting one. Both instruments offer unique advantages and drawbacks, making it crucial to understand their key differences...

What does the leverage ratio of contract trading mean?

Dec 16,2024 at 12:43pm

What does the leverage ratio of contract trading mean?IntroductionLeverage ratio is a key concept in contract trading, allowing traders to gain exposure to a larger position than their initial capital would allow. This can potentially amplify both profits and losses, making it crucial for traders to understand its implications.Understanding Leverage Rat...

What scams exist in leveraged trading of virtual currency contracts?

Dec 16,2024 at 12:42pm

What Scams Exist in Leveraged Trading of Virtual Currency Contracts?Leveraged trading of virtual currency contracts, also known as margin trading, can be a lucrative way to increase your profits. However, it is important to be aware of the various scams that exist in this market so that you can protect yourself from losing your money.Pump-and-dump scams...

What is 20x leverage on Bitcoin contracts?

Dec 16,2024 at 12:40pm

What is 20x Leverage on Bitcoin Contracts?IntroductionLeverage is a powerful tool in the world of trading that can magnify both profits and losses. However, it's essential to understand the risks involved before using leverage, especially when trading volatile assets like Bitcoin. In this comprehensive guide, we will delve into the concept of 20x levera...

What is the difference between Huobi’s margin trading and contract trading?

Dec 16,2024 at 12:39pm

Understanding the Distinctions between Huobi Margin Trading and Contract TradingIntroductionHuobi, a leading cryptocurrency exchange, offers diverse trading options to cater to traders' varying risk tolerance and investment goals. Among these options are Margin Trading and Contract Trading, each with distinct features and trading mechanisms. This compre...