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Bitcoin Derivatives OKX

How to trade perpetual swaps on OKX

2020.11.16 OKX

A step-by-step tutorial for trading cryptocurrency perpetual swaps on OKX

Perpetual swaps, like futures and options, are derivatives that track the price of an underlying asset. While perpetual swaps work like futures, they don’t have expiry dates, which means buyers and sellers can hypothetically keep their positions open “perpetually” — as long as their account holds enough margin to cover them.

The mechanism of price convergence is another key difference between perpetual swaps and futures contracts. With no settlement date for the former, a funding rate mechanism enforces price convergence at regular intervals (every eight hours). The funding rate is a fee exchanged between the long and short parties of a contract, depending on market movements, aiming to keep the contract price in line with the underlying asset’s spot price.

The OKX perpetual swap is a virtual derivative product where each swap contract has a face value of $100 and is settled in digital currencies, such as BTC, and USDT (for coin-margined and USDT-margined swaps, respectively). If you want to trade cryptocurrency perpetual swaps on OKX, this tutorial will help you get started.

Step 1: Go to the perpetual swap section

Visit the OKX homepage and navigate to Trade in the top menu to see available markets. Then, click on Margin trading

At the Margin trading section, click the trading pair and then the switch icon. Then, click Perpetual.

To access the Trade section on the OKX app, log in to your account and tap Trade on the bottom toolbar. 

Tap the trading pair to the top of the Trade section, followed by the switch icon. Then, tap Perp.

Step 2: Transfer funds to your trading account

To trade on OKX, your funding account needs to be funded. If you do not have any balance in your funding account, click on Transfer from the Assets dropdown list in the top menu to move funds between accounts. 

You’ll find Transfer on the bottom toolbar on the mobile application — the other steps are the same. 

If you do not have any crypto assets on your OKX account, you can either buy crypto or learn how to deposit crypto on OKX with our beginner’s guide to crypto trading.

When your account is funded, you can use the Transfer function, as shown below, to move coins or tokens from your “Funding account” to your “Trading account” to start trading. Once you have selected a coin or token and entered your desired amount to transfer, click Transfer.

Step 3: Choose the perpetual swap contract to trade

You then need to select the margin type at the top of the page — i.e., Crypto-margined for swaps settled in the underlying digital currency or USDT-margined for swaps settled in USDT.

After choosing the margin type, you can select the trading pair using the filters located at the top of the page (i.e., All for all available trading pairs, Top for the most popular trading pairs, DeFi for trading pairs with DeFi tokens, Storage for pairs with decentralized storage coins, or Alts for trading pairs with altcoins). Alternatively, you can scroll or search for the asset you want to trade. 

For this tutorial, we will select the USDT-margined perpetual swap contract labeled “BTCUSDT Perp.” In this perpetual swap contract, USDT is the settlement currency, and BTC is the price unit of the swap contract.

Step 4: Choose the type of leverage for swap trading

After funding your swaps account, you can select the margin mode (either “Isolated” or “Cross”) and choose the desired leverage multiplier. If you choose Isolated margin mode, only designated funds will be used as margin. In Cross margin mode, your entire account balance is used as margin.

A fixed margin allocates a set amount of margin to the trade and you can never lose more than that, while cross margin mode will attempt to use any available margin on your account, and will keep changing. 

As part of our Unified Account system, OKX offers three account modes — Single-currency, Multi-currency and Portfolio — to customize risk parameters further. Single-currency margin mode ensures that only the currency traded will be used as a position’s margin. In Multi-currency margin mode, all assets held in your account are used as the margin. 

You can learn more by reading our guide to margin trading on OKX.

Step 5: Enter order details and execute

After selecting the margin type and leverage multiplier, you can choose a desired “Order Type,” “Price” and “Amount” for the trade. If you would like to execute your order as soon as possible, you can click on BBO (i.e., the best bid offer).

After entering order details, you can click on Buy (Long) to enter a long contract (i.e., to buy BTC) or click on Sell (Short) if you would like to open a short position (i.e., to sell BTC).

For example, you can set up a limit order of 44,120 USDT and open a long position for “BTCUSDT Perp” with your desired BTC amount.

The layout in the application is almost identical to that of the website. As such, the above steps apply to both.

Step 6: (Optional) Set up the order with TP/SL

Before you click Buy (Long) or Sell (Short), you can also select either Take profit or Stop loss. You’ll find more information about these helpful risk management tools here

When using these options, you can enter conditions for taking profit and stopping loss. Once you’ve entered your desired parameters, click Buy (Long) or Sell (Short).

Step 7: Review your open position

After your trade is executed, you can review the status of your position by scrolling down to the trade history window on the trading homepage. Open orders are unfilled orders waiting to be executed. Positions, on the other hand, are executed trades. 

If you would like to offset or close an open position, you can do so by entering a price and an amount to close and clicking Close. You can also click MKT Close All to exit an entire position at the current market price. 

This latter option should be reserved for times when you need to exit a position immediately — i.e., during extreme price movements — since you will be paying the higher Taker fee. Using limit orders to close a perpetual swap is cheaper in fees. You can learn more about OKX fees here.

Perpetual swap trading data and guides on OKX

OKX provides a variety of resources to help users understand perpetual swaps. You can click on Information in the top right corner of the perpetual swaps trading dashboard and view a positions tiers guide, liquidation history, funding rates and more.

Not a part of the OKX community? Sign up to get started trading perpetual swaps today. 

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.