The OKEX futures platform features a limit order margin call system to limit risk of system losses. The margin call system works slightly differently depending on whether cross-margin mode or fixed-margin mode is selected.
Cross-margin mode: all funds held in the futures account will be considered as margin. Both the amount of margin and account equity will fluctuate according to changes in market prices. If the investor's margin ratio breaches 0%, a margin call will be triggered. When a margin call is triggered, all of the user’s positions will be closed through limit orders that are automatically placed onto the market. Margin call limit orders that cannot be filled will contribute to system clawbacks at time of settlement/delivery. In the event of a margin call, the loss will equal to the total amount of equity held by the trader. To reduce the chance of a margin call, traders should open a lower number of contracts and use a lower factor of leverage.Cross-margin margin ratio = equity/margin – x; BTC: 10x leverage, x = 0.1, 20x leverage, x = 0.2; LTC 10x leverage, x = 0.2, 20x leverage, x = 0.4.
Fixed-margin mode: a fixed amount of margin will be used to support each opened position. This margin will not fluctuate according to market prices. Each position will have its own margin ratio. If any position’s margin ratio breaches 0%, a margin call will be triggered for that position only and the loss will equal to the total size of the position. All other positions will not be affected.Fixed-margin margin ratio = (position amount+UPL)/initial position margin - x; BTC: 10x leverage, x = 0.1, 20x leverage, x = 0.2; LTC 10x leverage, x = 0.2, 20x leverage, x = 0.4.
Margin call system: to avoid a chain of margin calls during times of high volatility, OKEX uses a limit order margin call system. When a margin call is triggered, limit orders will be placed onto the market according to a price that brings the account equity to 0 rather than placing orders according to the market price. The advantage of this approach is to minimize the effect on price of multiple margin calls, thus reducing futures price volatility. At the time of a contract's delivery, if any of the margin call limit orders have not been filled due to extreme market volatility, the futures system will incur losses. These losses will be 'clawed back' proportionately from all traders who have a net profit across all three contracts.
If the size of a customers’ position or open orders accumulate to a level which poses a clawback threat to the futures trading system or other users, OKEX may request to cancel your orders or close part of your position. As a final measure, OKEX reserves the right to limit or partially cancel the position or orders to reduce the risk in the system.