EEA Spot Margin FAQ
What Is Margin Trading?
Spot Margin trading on OKX allows you to borrow crypto assets to trade larger positions than your account balance would otherwise allow, all while buying or selling the actual asset on the spot market (not a derivatives contract). This means you’re entering real buy/sell trades on the live order book, just like a regular spot trade, but with borrowed funds added to your balance.
This increases your buying or selling power and enables you to open spot positions larger than your current balance. Because leverage magnifies both gains and losses, Spot Margin Trading requires a clear understanding of collateral, margin levels, and liquidation mechanics.
How does Spot Margin trading works :
When you open a margin position, the platform provides a loan from another user. Your account assets are used as collateral to secure that loan.
Let’s break it down: You have $1,000 USDC in your account. You want to buy $5,000 USDC worth of BTC using margin. OKX will allow you to borrow a certain amount of leverage (up to 10x), to place the full trade on the BTC/USDC spot market.
In this case, for example, OKX allows you to borrow at 5x leverage, to fulfil your $5,000 USDC order.
Once the order is filled, you own the full BTC amount in your margin account.
Your total position and unrealized PnL (profit and loss) will fluctuate with the BTC price.
You can sell your BTC later to repay the borrowed USDC, ideally with a profit.
Interest accrues on the borrowed funds until fully repaid.
A margin trade follows a simple sequence:
Provide collateral
Borrow assets (amount based on the available collateral on your account)
Open a long or short position with leverage
Repay the borrowed amount when the position is closed
All borrowed funds are strictly used for trading and cannot be withdrawn.
How does this "Borrowing" work?
1. Borrowing
OKX allows you to borrow funds from a lender based in EEA to open a margin position.
2. Asset Ownership
Once the trade executes:
If you buy on margin, you own the purchased crypto.
If you sold on margin (short), you’ve borrowed that crypto to sell and must buy it back later to repay.
3. Real Trades, Real Order Books
Every spot margin trade is executed just like a normal spot trade. This means:
The trade is visible in the public order book.
You’re subject to real market depth, price slippage, and execution speed.
Your orders can affect market prices, especially with large positions
Risks of Margin Trading
Here’s what to be aware of:
1. Liquidation Risk
If the market moves against your position and your margin ratio falls below a safe threshold, OKX may liquidate your position automatically to repay the borrowed funds and protect lenders.
2. Interest Costs
You pay interest on borrowed funds for the entire time the position is open. Holding margin trades for long periods can eat into profits, especially in sideways markets.
3. Amplified Losses
Just as margin can amplify gains, it also amplifies losses. You can lose more than your initial capital if the market moves sharply.
4. Borrowing Limits
Each margin pair has its own maximum leverage, borrowing limits, and interest rates. These can change based on market conditions or liquidity availability.
Spot Margin trading is currently available only to users based in EEA.
How do I avoid liquidation with trading tools and features?
What's liquidation?
Liquidation occurs when the value of your assets falls below the maintenance margin requirement. This results in your position being forcibly closed to cover the loss. On our platform, it helps prevent traders from owing more than their initial investment.
What are the tools and features to help you?
Maintain a healthy margin level: a key risk metric in tracking healthy measures, you can spot the margin level as on the image below. Liquidation happens when the level reaches 100% and the margin call alert is at 300% by default.
Always monitor your margin level
Use stop-loss orders: a stop-loss order automatically closes your position when the market price reaches a predetermined level, limiting potential losses.
Adjust leverage levels: modify your leverage as you prefer. As using high leverage increases the risk of liquidation, consider using lower leverage to reduce potential losses.
Set up liquidation alerts: set up liquidation alerts to notify you when your margin ratio approaches the maintenance level.
Risk management tools: use our built-in risk management tools, such as portfolio margin and position builder, to better manage your positions.
What happens if you get liquidated?
If liquidation occurs, we'll close your positions at the current market price to cover your losses. Any remaining funds after covering the loss will be returned to your account. It's important to understand the terms and conditions of our liquidation process to be fully prepared.
Visit here to learn more about trading and risk management.
Disclaimer
This content is provided for informational purposes only and may cover products that are not available in your region. It is not intended to provide (i) investment advice or an investment recommendation; (ii) an offer or solicitation to buy, sell, or hold crypto/digital assets, or (iii) financial, accounting, legal, or tax advice. Crypto/digital asset holdings, including stablecoins, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding crypto/digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances. Information (including market data and statistical information, if any) appearing in this post is for general information purposes only. While all reasonable care has been taken in preparing this data and graphs, no responsibility or liability is accepted for any errors of fact or omission expressed herein.
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