Leverage trading is widely understood by most investors as a method to amplify profits with minimal capital. Despite its higher risks, this "big wins with small stakes" approach remains popular among traders. Major exchanges, including OKX (formerly OKEx), have introduced leverage trading to meet market demand. But a common question arises: Is OKX contract trading volume calculated post-leverage? Let’s dive into the rules and mechanics.
How OKX Contract Trading Works
Contract Types
- Weekly Contracts: Expire on the nearest Friday.
- Bi-Weekly Contracts: Expire on the second nearest Friday.
- Quarterly Contracts: Settle on the last Friday of March, June, September, or December.
Opening a Position
- Users select price and quantity. The required initial margin equals the contract value divided by the leverage multiplier (e.g., 10x, 20x).
- Orders execute only if account equity covers the margin.
Margin Modes
- Cross Margin: All positions share pooled funds. Liquidations occur if equity drops below 10% (10x) or 20% (20x) of the margin.
- Isolated Margin: Each position’s margin and risk are calculated independently.
Position Management
- Adjust or close positions anytime to lock profits or limit losses.
- Unrealized P&L updates with market prices.
Settlement
- On expiry, contracts are settled at the delivery index price. Profits are credited to "Realized P&L."
Leverage Trading Rules
Key Terms
- Account Equity: Total assets in the leverage account.
- Borrowed Funds: Assets leveraged using margin.
- Risk Ratio: Determines liquidation risk (≥150% allows withdrawals; ≤110% triggers forced liquidation).
Liquidation Mechanics
Formula:
Risk Ratio = [(Equity - Interest) / Latest Price + (Trading Asset Equity - Interest)] / (Borrowed Assets / Latest Price + Borrowed Trading Assets) × 100%- Liquidation Price: Triggered when Risk Ratio ≤110%.
Interest & Repayment
- Interest accrues every 24 hours.
- Repayments prioritize oldest loans, covering interest first.
OKX Contract Fees
Fees are based on position size:
- Maker Fee: 0.02% (passive orders).
- Taker Fee: 0.05% (active orders).
Example:
- 10x leverage with 1 EOS → Position size = 10 EOS.
- Fees range from 0.002 EOS (maker) to 0.005 EOS (taker).
Risk Management Tips
- Monitor market trends and liquidation risks.
- Use stop-loss orders to mitigate volatility.
- Higher leverage = higher risk/reward.
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FAQ
Q1: Is OKX contract volume pre- or post-leverage?
A: Volume reflects the total leveraged position size, not just the initial margin.
Q2: How is liquidation price calculated?
A: It’s derived from the Risk Ratio formula, ensuring margins cover potential losses.
Q3: Can I change margin modes mid-trade?
A: Only with no open positions or pending orders.
Final Thoughts
Leverage trading on OKX offers significant profit potential but requires disciplined risk management. Whether going long or short, always:
- Analyze market conditions.
- Set clear entry/exit points.
- Avoid over-leveraging.
By understanding these rules, traders can harness leverage effectively while minimizing risks. Stay informed, trade wisely, and capitalize on market opportunities.