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How to Trade Cryptocurrency Token-Margined Contracts?

2020.01.02

《OKEx Margin Trading Rules》

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.

You can borrow tokens from OKEx, executing positions with 5 times of your capital. Your potential return is therefore multiplied, but so is your potential loss.

 How Token Margin Trading Works?

  1. Long a token: You can use your principal plus the borrowed token to buy another token and sell it until its price rises to a desired level. After repaying the loan and interest, the remaining amount is your multiplied gain.
  2. Short a token: trading is more than “buying before a rise” and “selling before a fall”. You can gain from a price fall by borrowing the token to sell it, and then buying back when its price has dropped to repay the loan and capture the price difference.
  3. You can also arbitrage or hedge exposure in combination with futures or perpetual swap trading.
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Advantages of OKEx Margin Trading

Hourly interest
High flexibility to suit your trading strategy

Super-low Interest
The rate is adjusted dynamically every hour

Multiplied Return
3x leverage with controlled risk

How to Trade?

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Start Token Margin Trading with 4 simple steps: 

  1. Transfer funds from your “spot account” to “margin account”
  2. Borrow tokens
  3. Margin Trade
  4. Interest and repayment

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. 

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  1. 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.

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An example of transferring ETH into ETH /USDT margin account.

On the Token Trading page, select a trading pair marked with “5X”, and click “Transfer” to deposit your asset from your wallet or another trading account to your margin account.

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A reminder of fund transfer will pop up on your first-time login to margin trading.

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  1. Borrow Tokens

Under “Tokens Trading”, select “5X Leverage” on your right to switch to leveraged mode.

Trading pairs with the “5X” tag are the ones with leverage supported. Above, the grey box shows a brief summary of your assets of the pair.

Borrowing limit: 0-4x the total token amount available in the trading pair of your margin account. You can trade with up to 5x of your capital.

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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. 

  1. Trade 
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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.

Trading example:

  1. To long ETH: Borrow USDT to buy ETH. When the price of ETH rises, sell ETH and repay the principal and interest in USDT, and the remaining amount will become your gain.
  2. To short ETH: Borrow ETH and sell. When the price of ETH drops, buy back ETH to repay the principal and interest, the remaining amount will become your gain.

4.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.

Select an existing margin account, click “repay” on the right, fill in the repayment amount and click “Submit” to repay the loan.

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Description:

  1. An hourly interest rate system is adopted to lower the borrowing cost.
  2. The interest rate is updated every hour based on the demand and supply of the token.
  3. The interest rate is locked for the first 24 hours after successful borrowing. The rate will be updated every 24 hours afterward.
  4. The interest must be repaid every 7 days. There is no time limit for the loan.

For the detailed rules, please refer to:

OKEx Margin Trading Rules (Effective from 04:00 Nov 26, 2018)

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