Understanding OKX Futures Trading: Margin Rates, Calculations, and Liquidation

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Introduction to Futures Trading Mechanics

Futures contracts on OKX involve complex calculations for margin requirements, profit/loss estimation, and risk management. This guide explains the key formulas and concepts every trader should master before engaging in perpetual contracts.

Core Components of Futures Trading

  1. Account Equity = Deposits + Realized P&L + Unrealized P&L
  2. Available Margin = Account Equity - (Position Size × Contract Face Value / (Mark Price × Leverage)) - Order Freeze Margin
  3. Yield Calculation = Profit / Initial Margin Required

Profit and Loss Formulas

Long Positions

Contract Profit = (Face Value/Entry Price - Face Value/Exit Price) × Quantity

Short Positions

Contract Profit = (Face Value/Exit Price - Face Value/Entry Price) × Quantity

Unrealized P&L

Margin Systems Explained

Cross Margin Mode

Initial Margin = Face Value × Quantity / Mark Price / Leverage

Margin adjusts with price movements

Isolated Margin Mode

Initial Margin = Face Value × Quantity / Entry Price / Leverage

Fixed margin that doesn't change

Key Risk Metrics

Maintenance Margin Rate

The minimum margin required to maintain a position. When your margin ratio falls below this threshold plus taker fees, liquidation occurs.

Margin Ratio Calculations

Isolated Positions

Margin Ratio = (Fixed Margin + Unrealized P&L) / Position Value
Position Value = Face Value × Quantity / Mark Price

Cross Margin

Margin Ratio = (Balance + Realized P&L + Unrealized P&L) / (Position Value + Order Freeze Margin × Leverage)

Liquidation Mechanics

Estimated Liquidation Price

Cross Margin

Complex calculation considering:

Isolated Long

(1 + Maintenance Rate) / (1/Entry Price + Fixed Margin/Face Value/Quantity)

Isolated Short

(1 - Maintenance Rate) / (1/Entry Price - Fixed Margin/Face Value/Quantity)

👉 Master advanced liquidation scenarios

Funding Fee System

Calculation Methodology

Funding Fee = Position Value × Funding Rate
Funding Rate = Clamp(MA((Contract Mid Price - Spot Index)/Spot Index), -0.3%, 0.3%)

Charged every 8 hours at 08:00, 16:00, 24:00 HKT

Settlement Impact

Mark Price Determination

Mark Price = Spot Index + Moving Average Basis
Basis MA = MA((Best Bid + Best Ask)/2 - Spot Index)

Daily Settlement Process

  1. P&L Settlement at 16:00 HKT daily:

    • Unrealized → Realized P&L transfer
    • New settlement price becomes mark price

  2. Loss Coverage Hierarchy:

    • Risk reserve fund
    • Profit-sharing among net profitable users

Position Adjustments

Leverage Changes

👉 Optimize your leverage strategy

Frequently Asked Questions

How is my available margin calculated?

Available margin deducts your current position requirements and any frozen margin from your total account equity. This determines how much you can use for new positions.

What happens during liquidation?

When triggered, the system takes over positions at bankruptcy price. Any surplus goes to the risk reserve fund. If losses exceed margins, they're first covered by the reserve fund, then shared among profitable traders.

Why does my liquidation price change?

For cross margin, it fluctuates with your overall account balance and unrealized P&L. For isolated positions, it remains fixed unless you manually adjust margin.

How often are funding fees charged?

Every 8 hours at Hong Kong time 08:00, 16:00, and 24:00. You only pay/receive if holding a position at these exact times.

What's the difference between mark and last price?

Mark price determines liquidation and P&L, while last price shows recent trades. The mark price mechanism prevents market manipulation affecting liquidations.

How can I avoid liquidation?