Spot margin trading is a powerful tool that allows traders to amplify their potential returns by using borrowed funds. It operates on a margin system, where you use your own cryptocurrency as collateral to open leveraged long (buy) or short (sell) positions. When you successfully open a position, it is displayed as a specific long or short holding. You can monitor this position to see profits or losses resulting from market movements. Within a unified account, any borrowed coins are shown as liabilities associated with the position. These borrowed funds cannot be withdrawn; closing your position and repaying the loan is how you finalize the trade.
Getting Started with Account Funding
Before you can begin spot margin trading, you must first transfer funds into your trading account.
- Open the OKX mobile application.
- Navigate to the ‘Assets’ tab.
- Select ‘Transfer’.
- Choose the currency you wish to transfer (e.g., USDT).
- Set the source as your ‘Funding Account’.
- Set the destination as your ‘Trading Account’.
- Enter the transfer amount.
- Confirm the transaction by clicking ‘Confirm’.
How to Open and Manage a Long Position
A long position is taken when you anticipate the price of an asset will rise.
Opening a Long (Buy) Trade
Let’s use a BTC/USDT trade as an example:
- In the OKX App, go to the ‘Trade’ section.
- Ensure your trading mode is set to ‘Spot’.
- Activate ‘Margin’ mode by toggling the option in the top right corner.
Configure your trade settings:
- Margin Mode: Choose between ‘Cross’ or ‘Isolated’.
- Order Type: Select ‘Limit Order’.
- Margin: Confirm it is set to ‘USDT’.
- Leverage: Select your desired leverage倍数.
- Enter your price and order amount.
- Click ‘Buy BTC’ and ‘Confirm’ to execute the order.
Closing a Long Position (Selling)
To close your position and realize your profit or loss:
- Go to the ‘Positions’ tab.
- Select the specific long position you wish to close.
- Click ‘Close Position’.
- Enter a closing price or select ‘Market Price’.
- Input the amount to close.
- Click ‘Close Position’.
Pro Tip: Using a ‘Take Profit/Stop Loss’ (TP/SL) order is a strategic way to manage risk. It allows you to automate closing your position to lock in profits or prevent further losses.
- From your open position, select ‘TP/SL’.
- Set your trigger price for takeprofit and your trigger price for stop-loss.
- Enter the order amount.
- Click ‘Confirm’.
For instantly closing your entire position at the current market price, simply select the position and use the ‘Close All via Market’ option.
Note: During periods of extreme market volatility, your limit orders may not be filled.
Monitoring Your Open Position
After opening a position, all relevant data is available in your ‘Positions’ list. This includes:
- Average Entry Price
- Estimated Liquidation Price
- Initial Margin
- Current P&L (displayed as a percentage and in USDT)
Checking Your Orders
On the main trading page, navigate to ‘Current Orders’ at the bottom. Here you can:
- View all active orders, including TP/SL orders.
- Cancel any open orders.
- Switch to the ‘History’ tab to review all past orders.
How to Open and Manage a Short Position
A short position is taken when you believe the price of an asset will decrease. The process is very similar to going long.
Opening a Short (Sell) Trade
Again, using a BTC/USDT trade as an example:
- Follow the same initial steps to enter the ‘Trade’ section with ‘Margin’ mode enabled.
- Configure your margin mode, order type, margin currency, and leverage.
- Enter your desired price and amount.
- This time, click ‘Sell BTC’ and then ‘Confirm’.
Closing a Short Position (Buying Back)
Closing a short position involves buying back the asset you borrowed. The process is identical to closing a long position:
- Go to ‘Positions’ and select your short position.
- Click ‘Close Position’.
- Choose your price (limit or market), enter the amount, and confirm.
The same TP/SL and ‘Close All via Market’ options are available for managing risk on short positions. For a deeper understanding of advanced order types and risk management, explore more strategies here.
Understanding Interest Calculation Rules
Borrowing funds to trade on margin incurs interest charges. The rules are as follows:
- Interest Accrual: In both Cross and Isolated margin modes, interest is charged on any outstanding loan (negative balance). However, in a cross-currency margin account, unrealized profits and losses from contracts enjoy an interest-free quota. Liabilities within this quota do not incur interest.
- Separate Calculation: Liabilities in Cross and Isolated modes are calculated and charged separately.
Settlement: Interest on borrowed coins is calculated and charged by the platform every hour, on the hour. The benchmark time is 00:00 (UTC).
- Example: If a user borrows coins at 22:55, no interest is recorded immediately. At 23:00, interest is calculated based on the loan amount. This interest is then deducted at 00:00. If the user repays the loan at 22:57, no interest will be charged for that borrowing period.
Frequently Asked Questions
What is the main difference between Cross and Isolated margin?
Cross Margin uses your entire account balance to prevent liquidation, potentially allowing for higher leverage but with greater risk to your total capital. Isolated Margin confines the risk to the specific funds allocated to that position, protecting the rest of your portfolio.
Can I withdraw the coins I have borrowed?
No, absolutely not. Borrowed coins are displayed as liabilities and are locked to your open position. They can only be used for trading within that position and must be repaid when you close it.
What happens if my portfolio value nears the liquidation price?
The exchange will issue a margin call warning. If your position's value falls and you cannot add more collateral, the platform will automatically liquidate your position to repay the loan, potentially resulting in a significant loss of your initial margin.
How is the interest rate for borrowed funds determined?
Interest rates are typically dynamic and based on market demand for borrowing a particular cryptocurrency. They can fluctuate hourly. The platform's fee schedule will provide the current rates.
Is spot margin trading suitable for beginners?
Due to the amplified risk of loss from leverage, margin trading is generally recommended for experienced traders who thoroughly understand the mechanisms and risks involved, including liquidation.
Can I modify a take-profit or stop-loss order after it's placed?
Yes, in most cases, you can cancel an existing TP/SL order and set a new one based on updated market conditions or your revised trading strategy.