Token trading is the purchase or sale of tokens for immediate delivery. You can earn the differences by exchanging between tokens.
While leverage uses debt to maximize the potential return in spot trading.
How Token Margin Trading Works?
- You can borrow tokens from OKEx, executing positions with 3 times of your capital. Your potential return is therefore maximized, but so is your potential loss.
- You can also short sell positions: to sell borrowed tokens and buy back after a period of time to earn the difference.
How to Trade?
Start Token Margin Trading with 3 simple steps:
- Transfer funds from your "spot account" to "margin account"
- Borrow tokens
First, login to OKEx and go to Token Trading. A pop-up window of our leverage trading user agreement will appear. Please read carefully and agree to the terms to continue.
- Transfer Funds from Your "Spot Account" to "Margin Account"
In your margin account, funds are segregated under different trading pairs. Select "transfer from" of the trading pair you wish to trade to move funds into the account. Note that only supported trading pairs will be shown under the tab.
An example of transferring BTC into BTC/USDT margin account.
- Borrow Tokens
Under "Tokens Trading", select "3X Leverage" on your right to switch to leveraged mode.
Trading pairs with the "3X" tag are the ones with leverage supported. Above, the grey box shows a brief summary of your assets of the pair.
Borrowing limit: 0.5-2x the total token amount available in the trading pair of your margin account. You can trade with up to 3x of your capital.
Trading pair: the denominator is the base token, which is the token you sell; the numerator is the quote token, which is the token you buy.
Let’s say we are trading BTC/USDT: you can borrow BTC to short BTC; or borrow USDT to buy BTC.
The brief summary above will update itself as the price changes.
Don’t forget to pay attention to your account once you are holding any position. You may close your position(s) whenever you prefer to stop loss / take profit. But when your account's equity has dropped to a certain level, it may trigger a forced liquidation. This is to make sure you won't lose more than your principal.
About Forced Liquidation
As stated in OKEx Token Lending Service User Agreement: "As a Token Lending Service user, by using the leverage tool, you agree to authorize OKEX.com to perform risk management actions if your leverage account is at risk (user assets/debt≤110%), including but not limited to selling your positions"
Risk ratio is computed per each token.
- User assets = principal + loan - interests
- Debt = All "borrowed" assets
- Risk Ratio = user assets/debt
System will notify user via SMS when risk ratio = 130% and liquidate all positions when risk ratio = 110%.
For commonly used terms in margin trading, please see Leverage Trading Glossary.
Interest and repayment
Interest is incurred daily and can be repaid at any time. (repayment must be made in the token borrowed)
For repayment, select "repay" and enter the amount.
Interest Computation: Interests would be computed and incurred per each borrowing instruction. Interests would then be incurred once after the borrowed order is accepted and accrued per 24-hour intervals. Interests payable is compounded to next terms on each 15 days. (That is, unpaid interests expense would be computed as principal and thus incurring compounded interests)
Repayment: Repayments will be used to cover the earliest loan orders, and pay off interest before principal. The repayment status will change to completed once all the debts have been paid off, then further interest will not be applied for the order.