Understanding Perpetual Contracts on OKEx

Introduction to Contract Trading

Contract trading is a widely discussed topic in cryptocurrency circles, yet many traders don't fully grasp its mechanics and underlying principles. At its core, contract trading serves as a financial instrument—when used strategically, it can help investors hedge against market volatility and potentially achieve substantial returns. However, improper use can lead to significant losses, making contract trading a double-edged sword where success depends entirely on the trader's skill and risk management.

👉 Discover advanced trading strategies on OKEx

Types of Contracts on OKEx

OKEx offers three primary contract types:

1. Perpetual Contracts
2. Futures Contracts
3. Options Contracts

Both perpetual and futures contracts are further divided into:

• USDT-margined contracts
• Coin-margined contracts

All contract types allow users to profit from both rising (long positions) and falling (short positions) markets, or to perform hedging operations.

Account Setup for Contract Trading

Before engaging in contract trading, users must complete two essential steps:

1. Fund Transfer

1. Open the OKEx app and navigate to [Assets] → [Fund Transfer]
2. Select your preferred cryptocurrency (USDT as example)
3. Transfer from [Funding Account] to [Trading Account]
4. Enter the transfer amount and confirm

2. Account Configuration

1. Click the upper-left icon on the trading page
2. Access [Account Information] → [Trading Settings]

3. Configure:

   • Account Mode
   • Trading Units
   • Order Mode (toggle between "Open/Close Position" and "Buy/Sell" modes)

Detailed Guide to Perpetual Contracts

OKEx's perpetual contracts are settled in cryptocurrency, allowing traders to speculate on price movements without expiration dates. These contracts never mature, providing continuous trading opportunities.

Bullish Strategy: Going Long

When anticipating price increases, traders can open long positions.

Opening a Long Position (Buy to Open)

1. Navigate to [Trading] page
2. Select [BTC/USDT] from the currency pair box
3. Choose [Perpetual] → [USDT Contracts] → [BTCUSDT Perpetual]
4. Select [Cross/Isolated Margin]
5. Choose [Limit Order]
6. Set leverage multiplier
7. Enter price and quantity
8. Click [Buy (Long)] → [Confirm]

👉 Master perpetual trading on OKEx

Closing a Long Position (Sell to Close)

Traders can close positions either from:

• The main trading page
• The specific position page

Position Page Method:

1. Click [Positions]
2. Select the position to close
3. Click [Close Position]
4. Enter price (or select market price)
5. Input quantity
6. Click [Close]

Alternative closing methods include:

• Stop-Loss/Take-Profit Orders

  1. Select position → [Stop-Loss/Take-Profit]
  2. Set trigger prices and quantity
  3. Confirm
• Market Close All for immediate full position closure

Bearish Strategy: Going Short

When expecting price declines, traders can open short positions. The process mirrors long positions but uses [Sell (Short)] instead of buy orders.

Futures Contracts Explained

OKEx's futures contracts are similar to perpetual contracts but have fixed expiration dates:

• Weekly
• Bi-weekly
• Quarterly
• Bi-quarterly

Trading operations follow the same pattern as perpetual contracts, with identical long/short position management.

Options Contracts Overview

Options grant the right (without obligation) to execute a trade at a future date. OKEx offers:

• Call options (bullish)
• Put options (bearish)

Trading Options

1. Professional Mode (T-style quotes)

   • More contract varieties
   • Advanced interface

2. Simplified Mode

   • Beginner-friendly
   • Streamlined selection

Options are European-style, exercisable only at expiration (4:00 PM HKT on expiry date). Profitable options auto-exercise while losing ones expire worthless.

FAQ Section

Q: What's the main advantage of perpetual contracts?

A: Perpetual contracts never expire, allowing continuous position management without settlement dates.

Q: How does leverage work in OKEx contracts?

A: Leverage multiplies both potential profits and losses. OKEx offers adjustable leverage up to 125x on some contracts.

Q: What's the difference between USDT and coin-margined contracts?

A: USDT contracts use stablecoin margins, while coin-margined contracts use the base cryptocurrency, exposing traders to additional volatility.

Q: Can I lose more than my initial investment?

A: With proper risk management (stop-loss orders) and isolated margin, losses are limited to your position size.

Q: How do funding rates affect perpetual contracts?

A: Funding payments (exchanged between long/short positions) help maintain contract prices close to spot market values.

Q: What happens if I don't close an options position before expiry?

A: In-the-money options automatically exercise, while out-of-the-money options expire worthless.

This comprehensive guide covers essential aspects of perpetual and other contract types on OKEx. Remember that successful trading requires continuous learning, disciplined risk management, and staying updated with market conditions. Always start with small positions as you gain experience with these sophisticated financial instruments.