Introduction to Manual transfers in isolated mode
Published on Dec 27, 2021Updated on Apr 17, 20248 min read
1. Isolated mode
Isolated mode offers two modes: Auto transfers and Manual transfers for users to choose from. This setting will determine the margin transfer logic of isolated positions in Margin, Futures, and Perpetual swap tradings.
Auto transfers: Automatically add or remove the margin for opening or closing positions
Manual transfers: You'll need to manually transfer a minimum margin of 10,000 USDT the first time before trading. Please note this option is mainly for professional users.
2. Manual transfers trading rules
2.1 Manual transfers of Margin isolated positions
1. After you transfer a Margin pair's asset to the isolated position, the asset will be displayed to you in the form of Margin holdings, but you have not opened any position.
The actual position is opened when the user's balance in the quote or base currency is negative due to a transaction or transfer.
| Term | Defination |
| Base currency balance | Current position balance in trading currency |
| Quote currency balance | Current position balance in the quote currency |
| Interest | Interest not deducted |
| Margin level |
Margin level=net assets of a position/(maintainance margin+fee) Net assets of a position = (balance of a quote currency position- outstanding interest of the quote currency) + (balance of a base currency position - outstanding interest of the base currency) * mark price Maintenance margin=borrowed assets in base currency*mark price*margin level+borrowed assets in quote currency*margin level Note: The maintenance margin here includes the maintenance margin for pending orders and positions. Borrowed assets in quote currency=|min(USDT position assets-sum of assets in USDT in pending sell orders,0)| Borrowed assets in base currency=|min(position assets in base currency-sum of assets in base currency in pending sell orders,0)| |
| Liquidation price | If the margin level = 100%, a liquidation is required. |
| PnL |
PnL=positive balance of a position-negative balance of a position-sum of the amount transferred in+sum of the amount transferred out According to the current mark price, we will calculate positive, negative balances and the amount transferred in or out of all positions in the quote currency. |
| PnL ratio | PnL ratio=PnL/(sum of the amount transferred in-sum of the amount transferred out) |
2. Validation rules for order placement
(1) The net assets of the user's position must be greater than the initial margin ratio required for the borrowed assets
(2) Both the borrowed assets in quote currency and the borrowed assets in base currency should be less than the borrowing limit
| Mode | Closing method | Rule | Example |
| Close in Position | Closing at market price |
1. Only pay off the liabilities, and the remaining assets will stay in the isolated positions. 2. Only the available assets can be used to close the positions. 3. The default setting is "Reduce only". |
The current isolated margin position is long—Its balance in base currency is 2 BTC, the balance in quote currency is 10,000 USDT, and interest is 10 USDT. 1. The system will calculate how much USDT needs to be bought to close the position and pay off liabilities (Negative balance, interest, and fees will also be included). If it is 10,020 USDT, our system will sell 2 BTC at the market price and stop when users receive 10,020 USDT. Due to transaction accuracy, it may exceed a little. 2. Assuming the average filled price is 10,000 USDT, buying 10,020 USDT requires 1.002 BTC, and the remaining 0.998 BTC will not be sold. 3. After closing the position, the remaining 0.998 BTC will stay in the isolated position. |
| Close in Position | Closing at limit price |
1. You can buy assets that exceed the liabilities. Once the liability is paid off, the margin position will be closed. The oversold assets(the part that does not exceed the positive balance) and the remaining will stay in the current position. 2. Only the available asset can be used to close the position. 3. The default setting is "Reduce only". |
The current isolated margin position is long position—Its balance in base currency is 2 BTC, balance in quote currency is 10,000 USDT, and interest is 10 USDT. 1. Sell 0.5 BTC at the filled price of 10,000 USDT, then 5,000 USDT is bought. After deducting the fee of 5 USDT and interest of 10 USDT, the remaining 4,985 USDT will be used to pay off the liability. With a remaining liability of 5,015 USDT, the position still exists. 2. After partially closing the position, the asset is 1.5 BTC, liability 5,015 USDT, and interest 0 USDT. 3. Sell 1 BTC at the filled price of 10,000 USDT, then 10,000 USDT is bought. After deducting the fee of 15 USDT, the remaining 9,985 USDT will be used to pay off the liability of 5,015 USDT. Since liability has been paid off, the position disappeared. 4. The remaining assets of 0.5 BTC and 4,970 USDT will stay in the isolated position. |
| Close in close short/close long area | Reduce only | The same as those of [Close in Position] | |
| Close in close short/close long area | Reduce + new position |
1. When the liability is paid off, the position will disappear. The positive asset (before overselling the current positive asset) will be used to open a Spot position. 2. Only the position assets can be used to close the position. A reverse position will be opened when the positive asset becomes negative. |
The current isolated margin position is a short position—Its available asset is 30,000 USDT, liability 2 BTC, leverage 5X, with interest and transaction fees temporarily ignored.
1. Buy 1 BTC at the filled price of 10,000 USDT. This order uses an asset of 10,000 USDT to pay off the liability of 1 BTC; 2. After partially closing the position: the remaining asset is 20,000 USDT, and the remaining liability is 1 BTC. Since the liability has not been paid off, the position still exists; 3. Buy 1.5 BTC at the filled price of 10,000 USDT. 1.5 BTC > the liability of 1 BTC. After the order is filled, the position will be closed first and then used for spot trading. 4. The position asset of 10,000 USDT is used to pay off the 1 BTC liability. After the long position is closed, the remaining asset is 10,000 USDT, among which 5,000 USDT is used to buy BTC. Since all these happen in spot trading, the quote currency balance is 5,000 USDT, and the trading currency balance is 0.5 BTC. 5. If the user sells 10,000 USDT to open a reverse position, which is a long position, then the quote currency balance is -5,000 USDT, and the trading currency balance is 1.5 BTC. |
2.2 Manual transfer of futures/perpetual isolated positions
Users can choose between Hedge and One-way mode when performing futures and perpetual isolated trading. See the below for details:
1) Hedge mode: Manual transfer supports single-currency isolated and multi-currency isolated mode only, and portfolio margin isolated mode is unavailable.
In manual transfer, the margin is managed independently in Hedge mode, which means users need to add the initial isolated margin for both long and short positions.
2)One-way mode: Manual transfer supports single-currency isolated, multi-currency isolated, and portfolio margin isolated mode is unavailable.
| Term | Explained |
| Total | For the One-way mode, the total of long positions is a positive number, and the total of short positions is a negative number. |
| Avg. open price | U-margined (Existing positions * Entry Price of Existing Positions + New positions * Entry Price of New Positions) / (Quantity of Existing + New positions) Crypto-margined (Existing positions + New positions) * Average Entry Price of Existing Positions * Average Entry Price of New Positions) / (Existing position * Average Entry Price of New positions + New positions * Average Entry Price of Existing positions) |
| Margin balance | current margin balance |
| Used margin |
Used margin = required margin for holding positions + frozen margin for pending orders 1. Required margin for holding positions: - Coin-margined Face value*contracts*multiplier／（mark price*leverage） -USDT-margined Face value*contracts*multiplier*mark price／leverage 2. Frozen margin for pending orders - Coin-margined Face value*contracts*multiplier／（order price*leverage） -USDT-margined Face value*contracts*multiplier*order price／leverage |
| Available margin | Available margin = margin balance + PnL - used margin - pending order fee |
| Margin level |
Margin level = (margin balance + PnL）/ ([position value ]* (maintenance margin ratio + fee rate) Position value = holding position value + pending order value - Coin-margined Position value = face value * (contracts + [pending open order amount])/ mark price - USDT-margined Position value = face value * (contracts + [pending open order amount]) * mark price Maintenance margin ratio calculation is based on the position value that includes pending orders. |
| Est. liquidation price | The mark price when the margin level is 100 |
| P&L |
Unrealized profit or loss of current position - Coin-margined P&L of long positions = face value * |contracts| * multiplier * (1 / avg. open price – 1 / mark price) P&L of short positions = face value * |contracts| * multiplier * (1 / mark price – 1 / avg. open price) - USDT-margined P&L of long positions = face value * |contracts| * multiplier * (mark price – avg. open price) P&L of short positions = face value * |contracts| * multiplier * (avg. open price – mark price) |
| PnL ratio | PnL/initial margin |
3. Risk assessment
The risks of isolated positions in different instruments are measured separately, and the risks of isolated positions are isolated from that of cross positions. The risk assessment of isolated positions is based on the margin level, and the calculation methods for different trading products are slightly different.
3.1 Isolated margin position
1) Order cancellation by risk control system
If the user’s net balance - pending order fee < current borrowings * maintenance margin ratio + (borrowings after the pending order is filled - current borrowing) * initial margin ratio, the pending orders that will increase the liability will be canceled.
2)Pre-liquidation verification
A liquidation alert will be triggered if the margin level of an isolated position is < 300%, and the system will send a liquidation alert to the account, letting you know the risk of liquidation. 300% is an alert parameter, and OKX reserves the right to adjust this parameter according to the actual situation.
A liquidation will be triggered if the margin level of an isolated position is <= 100%, and the system will cancel the orders with the opposite trading side, then the isolated margin position will be partially or fully transferred to the liquidation engine.
3.2 Isolated futures/perpetual positions
1) Order cancellation by risk control system
Trigger condition: Margin balance + PnL - pending order fees < maintenance margin + initial margin of pending orders
Scope: All pending orders that will increase the amount of the occupied equity will be canceled, including open orders, half-open and half-close orders, and open stop orders.
2)Pre-liquidation verification
A liquidation alert will be triggered when the margin level of an isolated position is < 300%, and the system will send a liquidation alert to the account, letting you know the risk of liquidation. 300% is an alert parameter, and OKX reserves the right to adjust this parameter according to the actual situation.
If the margin level of an isolated position is <= 100%, the position will be partially or fully liquidated.