1.1 These rules are formulated under a lawful, fair and transparent way to maintain reasonable control of the loan of the digital asset and margin trading, preserve an orderly market, and protect the legal rights of all investors.
1.2 The loan and margin trading stated in this document is the investment behavior which an investor provides collateral to OKEx ("We", "Us", "Our platform", "Our") to borrow assets for trading.
1.3 All loan and margin trading on OKEx.com shall comply with the rules stated in this document. Other activities not stated in this document shall comply with "OKEx Terms of Service" and other rules set on OKEx.com
2.Margin Trading Glossary
Under token trading page, select the trading pair tagged with "3X" and click "3X Leverage" on the right side to enter leverage trading.
This article aims to provide a glossary to explain all the commonly used terms in leverage trading.
Total Assets: The total sum of tokens in your Margin Account for Spot, including available balance and balance on hold.
Transferred Assets: The amount of tokens transferred from other accounts to your Margin Account for Spot.
Borrowed Assets: Total Borrowed amount of tokens by using your available asset in Margin Account for Spot as collateral.
Available Assets: The total amount of tokens available for trading in Margin Account for Spot.
Assets on hold: The amount of tokens which is unavailable for creating orders, usually refers to the tokens that are currently in use for open orders.
Borrowing limit: Max quantity of token available to borrow of the corresponding token pairs. OKEx would determine the borrowing limit for a user with maximum leverage and other risk parameters.
Maximum leverage formula: Max leverage = (Total assets - outstanding loan - interest payable) * (max leverage multiplier - 1) - outstanding loan
2.3 Risk ratio and Forced liquidation
Risk ratio: The indicator for evaluating margin account's possibility of triggering forced liquidation. When risk ratio ≥150%, the surplus balance can be transferred out to Spot Account. When risk ratio ≤130%, it indicates a high-risk status, system will notify the user automatically via SMS. When risk ratio ≤110%, forced liquidation will be triggered and a SMS will be sent to notify the user.
Risk Ratio Formula: Risk Ratio = [(Total Assets (In Base Currency) – Interests Payable (In Base Currency) ) / Last Trade Price + (Total Assets (In Trading Currency) – Interests Payable (In Trading Currency)]/(Borrowed Assets (In Base Currency) / Last Trade Price + Borrowed Assets (In Trading Currency) ) * 100%
Forced liquidation: When risk ratio ≤110%, forced liquidation will be triggered. All positions will be taken over by the platform and force closed in the market.
Margin Call Ratio: 110%
Estimated Price on Margin Call: A certain amount of margin is required for leverage trading in OKEx. When unfavorable changes occur in the market, such as a reverse trend of market direction which contradicts the direction opened, the account balance may shrink below the perimeter, and system will force liquidate all holding positions at best bid /offer to pay off the debt.
Formula (Est. Price of Margin Call): Forced Margin Call Est. Price = (Borrowed Assets (In Base Currency) * Risk Ratio + Interests Payable (In Base Currency) – Total Assets (In Base Currency) / (Total Assets (In Trading Currency) – Interests Payable (In Trading Currency) – Borrowed Asset (In Trading Currency) * Margin Call Ratio)
Short Selling: Selling of tokens which the user does not own, and buy back after a period of time.
3.1 Investor shall agree to "OKEx Token Lending Service User Agreement" in advance of performing any related trading activities
3.2 Investor may place margin trading orders with us via OKEx.com to borrow/repay digital assets, including BTC and other tokens approved by us.
3.3 We provide information release, management and risk control services for token lending. However, there have been no promises, guarantees or warranties suggesting that any trading will result in a profit or will not result in a loss. Investors shall carefully consider whether such an investment is suitable in light of their own financial position and investment objectives, and invest responsibly at their sole discretion.
4.Settlement and Delivery
4.1 The asset in the borrower's margin account on OKEx.com shall be deemed as the collateral.
4.2 Once the loan is successful, the borrowed asset will be delivered to the borrower's margin account on OKEx.com immediately. The borrower can perform margin trading with the borrowed asset forthwith.
4.3 Interest rate calculation
- Rules for interest rate: The daily interest rate for loans is updated every hour. The system calculates the base rate dynamically based on the demand for margin loans and supply from the deposit of OK PiggyBank, and hence determines the actual daily rate for a user. The actual loan daily rate = sum of the base rates in the past 24 hours / 24. Therefore, the actual loan daily rate at every hour on the hour will be updated. If an update delay takes place on the margin loan page, please refer to the rate history page for the rate.
- Rules for base rate allocation: The rates of each asset are divided into 5 tiers depending on its loan-deposit ratio. See the table below. OKEx reserves the right to adjust the base rate allocation in the future. As the QTUM and IOST loan services have stopped and these two assets are not supported in OK PiggyBank, their daily rates are fixed at 0.0002.
4.4 Rules for rate maintenance:
The loan daily rate for a loan borrower locks for 24 hours after each update for the user to maintain the cost of the loan for 24 hours. The daily rate is updated every 24 hours to the latest loan daily rate. For example, if User A borrows BTC at 10:32 Nov 26, 2018, and the loan daily rate is 0.0002, the rate on every hour before 10:32 Nov 27, 2018 is 0.0002/24. At 10:32 Nov 27, 2018 when the loan daily rate of the BTC loan for User A is updated, the loan daily rate at 10:00 Nov 27, 2018 will be taken for the calculation. If the actual daily rate at that time is 0.0001, the loan daily rate for User A will be updated to 0.0001 and maintain for 24 hours. The BTC actual loan daily rate will be updated again at 10:32 Nov 28, 2018.
4.5 The loan borrower should repay the capital and interest on the loan maturity date. The interest is calculated in simple interest on an hourly interest rate (daily rate / 24). An interest-bearing hour is counted from the time the loan is made. Every 60 minutes is considered as 1 hour (counted from the borrowing time; partial hour is considered as full hour). Interest is incurred at the time the loan is made and every 1 hour afterward.
4.6 The borrower can repay the loan in advance. The interest will be accrued at hourly rate. However, time less than 60 minutes shall also be counted as 1 hour.
4.7 The borrower must repay the interest once every 7 days. Users may choose to repay the interest in advance of the deadline (the 7-day countdown will be reset immediately after the repayment) or be charged automatically by the system at the deadline. If the user does not have enough balance, our system may buy/sell, cancel, or reset orders (orders will still be placed at the minimum order size even if the interest amount is smaller than the minimum order size). We strongly recommend users to repay the interest on time to avoid their trades being interfered by our system.
4.8 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. In case of bonus and fork, a loan borrower should repay the additional assets generated in the bonus, fork or other events to OKEx.
4.9 If forced liquidation occurs, after repaying all the debts, 10% of the user's remaining asset will be charged as the liquidation fee and be injected into the margin trading insurance fund, which is used to cover the market loss of bankruptcy positions.
4.10 OKEx will take 15% of daily distributable interest as the platform's income（Currently, this income is totally injected to the insurance fund for margin trading, which is used for compensating for any margin call loss. OKEx reserves the right to determine the use of such income in the future.）In case the margin trading insurance fund cannot cover a margin call loss, the daily distributable interest will be clawed back to cover the outstanding loss. (Only maximum 50% of the daily interest income will be clawed back so as to ensure users receive interest income every day.) The outstanding loss not covered by the clawback amount will be covered in advance by OKEx and the amount will be set off against the insurance fund and daily distributable interest gradually in the future.
5.1 Only the asset in the margin account on OKEx.com will be deemed as the collateral. The asset in other accounts will not be deemed as collateral.
5.2 The total value of the investor's asset = the total value of the asset in the margin account of the trading pair on OKEx.com - the total value of interest
The liabilities of the investor = the total value of the asset borrowed in the margin account of the trading pair on OKEx.com
Liabilities-asset ratio = asset/liabilities
5.3 When the liabilities-asset ratio hits: 130%, an alert will be sent to the investor via the contact information provided to notify him/her the risk; 110%, the account will be force-liquidated to repay all the liabilities of the investor. If the investor has multiple loans, the loans will be repaid in chronological order. If all the investor's asset is not enough to repay the loan, the lender reserves the right to collect the debt.
5.4 Investors are advised to exercise caution, beware of investment risks, and adjust the margin level when necessary. The losses caused by forced-liquidation shall be borne by the investor solely.
5.5 We hold the right to manage the value of the borrowed tokens. When the total value of the borrowed tokens has exceeded the total loan amount limit which was formulated by us, we will cease the token loan services until the total value of the borrowed tokens drops below the limit.
5.6 We will adjust the total loan amount limit depending on the market's performances and our evaluation of potential risk.
5.7 If the borrower is unable to repay the interest with the asset in the margin account, the insurance fund for margin trading will be used for compensating for any margin call loss, In case the margin trading insurance fund cannot cover a margin call loss, the daily distributable interest will be clawed back to cover the outstanding loss. (Only maximum 50% of the daily interest income will be clawed back so as to ensure users receive interest income every day.) The outstanding loss not covered by the clawback amount will be covered in advance by OKEx and the amount will be set off against the insurance fund and daily distributable interest gradually in the future.
6.1 Investors shall comply with local regulations and law as well as the related rules of trading and margin trading of OKEx.com. We reserve the right to suspend or cancel any user's access to margin trading, take over the account, force-liquidate all positions or any related risk control measure when deemed necessary to maintain an orderly market.
7.1 The terms not less than, within, not more than are all inclusive terms and the terms less than, beyond and over/below are exclusive terms. Daily interest will be accrued according
7.2 The terms are established by our company. This document or any further amendments are in effect immediately after make known through publication.
7.3 We reserve the right of interpretation of this document
7.4 The terms are implemented since Nov 26, 2018