a) When a futures trading account is set up, users should first select a margin mode. Each margin mode uses different calculations for the required margin level and degree of risk. The user can only change the margin mode when he has no open positions or pending orders. See the “OKEX Margin Call and Risk Management System” FAQ for more information on different margin modes.
b) The user should select long/short direction and contract type according to judgement on market direction and required time frame. Currently, OKEX offers three contract lengths: weekly, monthly, and quarterly.
c) A contract of the current week refers to a contract delivered on the next Friday relative to the current trading day. A monthly contract refers to a contract delivered on the last Friday of a month closest to the trading day. If the weekly and monthly contracts coincide, then monthly contract will refer to the last Friday of the next month. Quarterly contracts settle on the last Friday of March, June, September or December. If the monthly and quarterly contracts coincide, then the quarterly contract will refer to the next quarter.
d) The user should choose number of contracts and price according to requirements. When users purchase a contract, the required margin can be calculated by dividing the contracts’ value in BTC by the leverage multiple.
e) In cross-margin mode, the balance of the trader’s equity account will fluctuate according to the latest futures market price. A margin call will be triggered if the trader’s equity does not meet the margin requirements for the positions held. The margin requirements are different when 10x or 20x leverage is selected. For BTC contract, if due to unrealised losses the account equity becomes less than 10% of account margin with 10x leverage selected, or less than 20% of account margin with 20x leverage selected, then a margin call will be triggered. For LTC contract, the threshold is 20% with 10x leverage selected or less than 40% of account margin with 20x leverage selected,. In fixed-margin mode, the trader’s gains or losses will be limited to each separate position, and the margin will remain unchanged. When the margin ratio for an individual position reaches 0%, then a margin call will be triggered for this position only.
f) According to market conditions, users may at any time make adjustments to their positions, close positions to lock in profits or losses, or open more positions to increase potential profits.
g) During contract delivery, all open contracts will be closed according to 1 dollar per index point. All profits & losses produced by closing the contracts will be allocated to the RPL.
h) After delivery, the system will calculate the total system losses caused by unfilled margin call limit orders. The system will then deduct a proportional amount from all users’ realised profits (“clawbacks”) to offset the system loss.
i) After the clawbacks have been calculated and deducted, the remaining profits and losses will finally be allocated to the trader's account equity.
j) After the expiration of a contract, the exchange will issue a new tradable contract.