Introduction to Margin Trading
Margin trading allows traders to amplify their positions by borrowing funds. On OKX (formerly OKEx), selecting a trading pair marked with indicators like "5X" and clicking the "5X Margin Trading" tab initiates leveraged trading.
Key Concepts Explained
Asset Categories
- Total Assets: Sum of available + frozen assets in your margin account
- Transferred Assets: Cryptocurrencies moved from other accounts
- Borrowed Assets: Funds borrowed using transferred assets as collateral
- Available Assets: Funds ready for trading (including borrowed amounts)
- Frozen Assets: Funds locked in active orders
Leverage Mechanics
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Maximum Borrowable Amount Formula:
(Account Balance - Outstanding Loans - Unpaid Interest) × (Max Leverage - 1) - Outstanding Loans
Example: With 5 BTC balance, 1 BTC loan, 0.01 BTC interest, and 5X leverage:
(5 - 1 - 0.01) × 4 - 1 = 14.96 BTC borrowable
Risk Management
Margin Ratio:
- ≥50% (3X) / ≥25% (5X): Allows withdrawals
- ≤20%: Risk warning issued
- ≤10%: Forced liquidation
Calculation:
[((Quote Currency Balance - Borrowed - Interest)/Price) + (Base Currency Balance - Borrowed - Interest)] / (Borrowed Quote/Price + Borrowed Base) × 100%
Liquidation Price Formula:
(Borrowed Quote + (Borrowed Quote × 10%) + Interest - Quote Balance) / (Base Balance - Interest - Borrowed Base - (Borrowed Base × 10%))
Short Selling Strategies
Borrowing a cryptocurrency constitutes a bearish position on that asset.
Interest & Repayment
- Hourly Interest: (Daily Rate ÷ 24)
- Repayment Priority: Oldest loans first → Interest before principal
FAQ Section
How does OKX calculate margin requirements?
Margin requirements vary by leverage level (3X/5X) and are dynamically adjusted based on asset volatility.
What happens during liquidation?
The system automatically sells positions at optimal market prices to repay debts when the margin ratio hits 10%.
Can I repay loans early?
Yes, early repayment reduces interest costs. The system processes payments hourly.