Welcome to a comprehensive guide outlining the terms, conditions, and mechanics behind margin and derivatives trading on OKX. This document serves as an essential resource for users engaging in advanced trading strategies such as Margin Trading, Futures, Options, and Perpetual Contracts. Whether you're a Retail, Qualified, or Institutional Investor, understanding the structure, risks, and operational protocols is crucial to navigating the digital asset markets effectively.
Understanding the Agreement Framework
Scope and Applicability
This Margin and Derivatives Trading Agreement governs all services provided by OKX Middle East Fintech FZE ("OKX") through its trading platform. The agreement supplements the broader Terms of Service and must be read in conjunction with them. While most provisions from the Terms of Service are incorporated by reference, this agreement takes precedence in case of any conflict.
OKX reserves the right to update this agreement periodically to reflect regulatory changes, market conditions, or platform enhancements. Users are encouraged to review it regularly to remain compliant.
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User Classification
Under the Dubai Virtual Asset Regulatory Authority (VARA) rules, users are classified into one of three categories:
- Retail Investor
- Qualified Investor
- Institutional Investor
Retail Investors are restricted to Margin Trading only, while Qualified and Institutional Investors may access Futures, Options, and Perpetual Contracts. It is the user’s responsibility to notify OKX of any changes affecting their classification status.
Available Trading Services
OKX offers a range of sophisticated financial instruments designed for both speculative and hedging purposes.
Margin Trading
Margin Trading allows users to borrow funds to increase their trading position beyond their account balance. To initiate a trade:
- Deposit Virtual Assets or Eligible Fiat Currency (USD or AED) as collateral.
- Utilize Leverage, which amplifies both potential gains and losses.
- Pay interest on borrowed assets once a position is filled.
Leverage amounts are displayed in real time on the trading interface and may be adjusted by OKX at its discretion, subject to applicable laws. Users must maintain sufficient Maintenance Margin to avoid liquidation.
Derivatives Products
Derivatives enable exposure to price movements without owning the underlying asset. These include:
- Futures Contracts: Agreements to buy/sell a specified virtual asset at a predetermined price and future date.
- Options Contracts: Provide the right—but not the obligation—to buy or sell an asset at expiry.
- Perpetual Contracts: Similar to futures but without an expiration date, featuring a recurring Funding Rate mechanism.
Each product comes with detailed Contract Specifications available on the platform, which may be updated with prior notice via email or in-app alerts.
Risk Management and Account Mechanics
Trading Account Modes
OKX supports multiple margin modes to suit different risk appetites and strategies:
- Spot and Futures Mode: Isolates margin and settlements per asset.
- Multi-Currency Margin Mode: Converts all assets to USD equivalent for shared margin calculation.
- Portfolio Margin Mode: Groups positions by underlying asset for holistic risk assessment.
Access to Multi-Currency and Portfolio Margin Modes requires a minimum net equity of $10,000.
Users can also select Isolated Margin to limit exposure per position, enhancing control over risk concentration.
Maintenance and Liquidation Thresholds
The health of your trading account is measured by the Margin Ratio—the ratio of equity to Maintenance Margin.
- An Early Warning Notification is triggered when your Margin Ratio drops below 300% (default setting; adjustable to 150% or 200%).
- If the ratio falls to 100% or below, OKX may fully or partially liquidate your positions.
Liquidation actions may include closing positions, selling assets, or canceling pending orders. A liquidation fee may apply.
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Key Operational Features
Funding Rate in Perpetual Contracts
Perpetual Contracts use a Funding Rate to align contract prices with the spot market. This rate:
- Is calculated every 8 hours (04:00, 12:00, 20:00 UTC+4).
Determines payments between long and short position holders:
- Positive rate: Longs pay shorts.
- Negative rate: Shorts pay longs.
Funding rates vary by contract and are subject to updates based on market dynamics.
Settlement Processes
- Futures: Delivered weekly at 12:00 PM UTC on Fridays.
- Daily Settlement: Applies to select contracts (e.g., BTC/USD, ETH/USDT) in cross-margin mode at 8:00 AM UTC.
- Options: Automatically exercised if in-the-money at expiry.
All settlements use the average mark price from the hour preceding settlement.
Fees, Payments, and Taxation
Fee Structure
OKX charges fees for:
- Opening, closing, or liquidating positions.
- Funding transfers.
- Settlement processing.
A full fee schedule is available on the platform and may be updated periodically. Fees are automatically deducted from your margin account upon execution.
Tax Considerations
Depending on jurisdiction, OKX may apply Value Added Tax (VAT) or other applicable taxes. These are listed on invoices and charged in addition to service fees.
Risk Disclosure and Investor Responsibility
Trading leveraged products involves significant risk. Key points include:
- Leverage magnifies both gains and losses—small price movements can lead to substantial outcomes.
- Users must actively monitor their positions and margin levels.
- OKX may increase margin requirements due to volatility, news events, or regulatory changes.
- The Insurance Fund helps cover losses during extreme market moves but is not guaranteed. If depleted, users may owe additional funds.
Auto-Deleveraging (ADL) activates if the Insurance Fund drops 30% within 8 hours. During ADL:
- Profits are redistributed from winning positions to cover losses.
- The most profitable open positions are closed first.
- No trading fees apply during forced closures.
ADL deactivates when the fund recovers by 75% within 8 hours or reaches $8,000 in value.
Frequently Asked Questions
Q: What happens if my margin ratio drops below 100%?
A: OKX may liquidate part or all of your positions to prevent further losses. You will receive a notification, but it's your responsibility to act promptly.
Q: Can I change my preferred margin mode?
A: Yes, users can switch between available modes based on eligibility. Portfolio and Multi-Currency Modes require $10,000 minimum equity.
Q: How often are funding rates applied in perpetual contracts?
A: Every 8 hours—at 04:00, 12:00, and 20:00 UAE time (UTC+4).
Q: Are options contracts exercisable before expiry?
A: No—options on OKX are European-style, meaning they can only be exercised at expiry.
Q: What triggers Auto-Deleveraging?
A: ADL activates when the Insurance Fund declines by 30% from its daily peak within 8 hours.
Q: Do I need to manually settle futures contracts?
A: No—settlement is automatic based on contract specifications. Open positions are closed at expiry unless rolled over.
Final Provisions
Account Statements and Amendments
OKX provides monthly account statements via the platform. Real-time data on open positions and margin usage is always accessible.
This agreement may be amended in line with the Terms of Service. Continued use constitutes acceptance of updates.
Termination
You may terminate your account after settling all liabilities. OKX also reserves the right to terminate access at its sole discretion.
By engaging in margin and derivatives trading, you acknowledge the inherent risks and agree to comply with all terms outlined herein. Stay informed, manage your exposure wisely, and leverage OKX’s robust infrastructure to enhance your trading journey.
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