Understanding Long and Short Positions on OKX
The OKX exchange (formerly OKEx) offers advanced trading features, including perpetual contracts that allow investors to profit from both rising and falling markets. Unlike traditional spot trading, perpetual contracts enable you to:
- Go Long: Profit when asset prices rise
- Go Short: Profit when asset prices decline
These contracts use crypto assets for settlement and never expire, providing continuous trading opportunities.
Step-by-Step Trading Process
1. Fund Transfer Preparation
Before trading perpetual contracts:
- Navigate to "Asset Management" → "Fund Transfer"
- Select your desired cryptocurrency
- Transfer funds from your spot/other accounts to your perpetual contract account
- Confirm the transaction
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2. Contract Type Selection
From the trading interface:
Choose between:
- Coin-margined contracts (collateral in traded crypto)
- USDT-margined contracts (collateral in stablecoin)
- Select your preferred trading pair
3. Account Mode Configuration
Set your preferred trading parameters:
Margin mode:
- Isolated: Risk limited to position margin
- Cross: Entire balance serves as collateral
- Leverage: Adjustable between 0.01x-125x
- Trading units: Customize as coins or contracts
4. Opening and Closing Positions
Execution options include:
- Limit orders
- Advanced limit orders
- Stop-loss/take-profit orders
- Market orders (current price)
Enter your desired price/quantity and click:
- "Buy/Long" for bullish positions
- "Sell/Short" for bearish positions
Key Features of OKX Perpetual Contracts
| Feature | Perpetual Contracts | Delivery Contracts |
|---|---|---|
| Expiration | Never expires | Fixed settlement date |
| Pricing | Mark price system | Last hour average |
| Funding mechanism | Regular payments | N/A |
| Liquidation | Reduced frequency | Standard procedure |
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Profit Mechanics in Contract Trading
- Long positions profit when prices rise
- Short positions profit when prices fall
- Funding rates balance market positions between bulls/bears
- No forced settlement (unlike time-bound delivery contracts)
FAQs
Q: What's the minimum leverage on OKX?
A: You can use as low as 0.01x leverage, suitable for conservative strategies.
Q: How often are funding fees paid?
A: Typically every 8 hours, calculated based on market position imbalances.
Q: Can I change margin modes after opening a position?
A: No, margin modes must be set before position opening and remain fixed.
Q: What's the advantage of mark pricing?
A: It prevents unnecessary liquidations during high volatility by using fair price calculations.
Q: How do short positions work during a bull market?
A: Shorter pay funding fees to longs, making sustained shorts more expensive in bullish conditions.
Q: Is there a difference between coin-margined and USDT-margined P&L?
A: Yes - coin-margined profits are in the traded asset, while USDT-margined shows in stablecoin value.