Understanding Contract Trading
While many investors have mastered spot trading, futures contracts remain unfamiliar territory for most. Contract trading involves agreements between buyers and sellers to exchange an asset at a predetermined future price. This method gained popularity following major cryptocurrency market fluctuations. But how exactly does futures trading work on OKX Exchange? Let's explore the complete process.
Step-by-Step OKX Contract Trading Tutorial
1. Selecting Contract Type and Direction
👉 Master your trading strategy with these options:
Contract Types:
- Weekly (settles nearest Friday)
- Bi-weekly (settles second nearest Friday)
- Quarterly (settles last Friday of March/June/September/December)
Direction:
- Long (betting on price increase)
- Short (betting on price decrease)
2. Order Execution
Users must:
- Choose appropriate entry price
- Determine position size
- Ensure sufficient account equity ≥ required margin
3. Margin Systems Explained
Full Margin Mode
- All positions share combined risk/reward
- Requires 100%+ margin ratio to open positions
Liquidation occurs when equity falls below:
- 10% for 10x leverage
- 20% for 20x leverage
Isolated Margin Mode
- Each position's margin calculated independently
- Requires separate available margin per contract
Liquidation threshold:
- 10% for 10x leverage
- 20% for 20x leverage
4. Position Management
After opening positions:
- Monitor unrealized P&L
- Track margin requirements
- Watch liquidation risks
5. Position Adjustment Strategies
👉 Optimize your trades by:
- Partial closing to lock profits
- Adding to winning positions
- Setting stop-loss orders
6. Settlement Process
On expiration date:
- Open positions settle at final index price
- Profits credited to "Realized P&L"
- Losses distributed among profitable accounts
7. Final Clearing
All realized profits/losses transfer to:
- Available balance (for isolated margin)
- Account equity (for full margin)
OKX Trading Fees Breakdown
| Product | Fee Rate |
|---|---|
| Spot Trading | 0.10%-0.15% |
| Margin Borrowing | 0.01%-0.098% |
| Futures Trading | 0.02%-0.05% |
| OTC Trading | Free |
FAQ Section
What's the minimum investment for OKX contracts?
There's no fixed minimum - it depends on the contract specifications and your selected leverage. Even small amounts can trade with proper position sizing.
How does leverage affect my risk?
Higher leverage amplifies both potential profits AND losses. Beginners should start with lower leverage (5x-10x) until comfortable with market dynamics.
Can I change margin modes after opening positions?
No. You can only switch margin modes when you have zero open positions and no pending orders.
What happens during forced liquidation?
The exchange automatically closes your position when margin requirements aren't met. You'll lose your margin and may incur additional losses if prices gap.
How often are contracts settled?
This depends on your selected contract type - weekly, bi-weekly, or quarterly. The platform clearly displays each contract's settlement date.
Is futures trading better than spot trading?
Each has advantages. Futures allow hedging and leverage, while spot trading is simpler. Many successful traders use both strategically.