Starting October 31, 2024, OKX will implement a refined initial margin calculation model for users trading under the one-way position mode across spot and futures and cross-currency margin accounts. This adjustment, effective from October 31, 2024, at 4:00 PM (UTC+8) to November 8, 2024, at 4:00 PM (UTC+8), aims to optimize capital efficiency and enhance the overall trading experience by reducing unnecessary margin burdens—especially in scenarios involving dual-sided orders.
This update reflects OKX’s ongoing commitment to improving risk management frameworks while empowering traders with smarter, more flexible tools. Whether you're managing leveraged positions or executing complex order strategies, understanding these changes is essential for maximizing your capital utilization and minimizing forced liquidations.
Understanding the New Initial Margin Model
The revised margin calculation focuses on one-way position mode, where long and short positions are managed independently within the same contract pair. Previously, margin requirements could be duplicated when both buy and sell orders were active simultaneously. The new system eliminates this redundancy by charging margin only for the higher of the two positions—long or short—thereby reducing overall margin usage.
👉 Discover how the new margin system can boost your trading efficiency
Updated Margin Calculation Formula
Under the adjusted model:
- Long Position Margin:
Max[(Position Value + Buy Order Value), (Sell Order Value – Position Value)] / Leverage - Short Position Margin:
Max[(Buy Order Value – Position Value), (Position Value + Sell Order Value)] / Leverage
This means that instead of summing both sides of open orders, the system now evaluates only the side with the greater exposure. For example, if a trader holds a long position and has pending buy and sell orders, the platform calculates margin based on whichever scenario poses a higher potential risk—long buildup or short exposure—and applies margin accordingly.
This change is particularly beneficial in high-frequency or scalping strategies, where traders often place both limit and stop orders simultaneously. With reduced margin consumption, users gain increased flexibility to manage multiple orders without prematurely triggering margin calls.
Incorporating Potential Unrealized Loss in Opening Cost
To maintain platform stability and protect user assets, OKX continues to include potential unrealized loss in the opening cost of futures contracts. This mechanism ensures that orders significantly deviating from the mark price contribute additional margin upfront, reducing systemic risk during volatile market conditions.
USDT-Margined Contracts
For USDT-margined futures:
- Buy Order Potential Loss:
Abs(Face Value × |Contracts| × Contract Multiplier × Min[0, (Mark Price – Order Price)]) - Sell Order Potential Loss:
Abs(Face Value × |Contracts| × Contract Multiplier × Min[0, (Order Price – Mark Price)])
If a buy order is placed above the mark price (premium), or a sell order below it (discount), the difference is considered a potential loss and factored into the required margin.
Coin-Margined Contracts
For coin-margined futures, which are settled in the base cryptocurrency:
- Buy Order Potential Loss:
Abs(Face Value × |Contracts| × Contract Multiplier × Min[0, (1/Order Price – 1/Mark Price)]) - Sell Order Potential Loss:
Abs(Face Value × |Contracts| × Contract Multiplier × Min[0, (1/Mark Price – 1/Order Price)])
These formulas account for inverse pricing dynamics inherent in coin-margined instruments. By integrating potential losses at order placement, OKX ensures adequate collateralization even before execution.
Note: For market orders, the platform uses an estimated fill price based on current liquidity and order book depth to calculate potential loss.
Benefits of the Adjustment
The updated framework delivers several key advantages:
- Lower Margin Requirements: Traders with dual-sided orders see reduced capital lock-up.
- Improved Capital Efficiency: More effective use of available balance for active strategies.
- Enhanced Risk Control: Retains conservative safeguards against extreme price movements.
- Seamless User Experience: No action required from users—the change is applied automatically.
This optimization is especially impactful for traders using grid bots, arbitrage strategies, or hedging techniques, where simultaneous buy and sell orders are common.
👉 See how advanced trading tools work seamlessly with the new margin rules
Frequently Asked Questions (FAQ)
Q: When does the new margin calculation take effect?
A: The updated initial margin model will be active from October 31, 2024, at 4:00 PM UTC+8 to November 8, 2024, at 4:00 PM UTC+8. After this period, OKX may evaluate performance and decide on permanent implementation.
Q: Does this change apply to both isolated and cross-margin modes?
A: Yes, the adjustment applies to accounts using cross-currency margin and standard spot and futures modes, but only under one-way position mode. Two-way mode remains unaffected by this specific update.
Q: Will my existing positions be impacted?
A: No. The change affects only new orders and margin calculations going forward. Existing positions continue under previous terms until closed or modified.
Q: How does this affect leveraged trading?
A: Leveraged trades benefit from lower initial margin demands when placing offsetting orders. However, liquidation risk is still determined by actual price movement and account health—not just initial margin.
Q: Is this update applicable to all contract types?
A: Yes, both USDT-margined and coin-margined futures contracts are included in this adjustment.
Q: Why does OKX factor in potential unrealized loss?
A: Including potential loss at order entry helps prevent under-collateralization if an order fills at a disadvantageous price. This protects both individual traders and the broader platform from cascading liquidations during fast-moving markets.
Strategic Implications for Traders
Traders should view this update as an opportunity to refine their order management practices. With reduced margin pressure:
- Consider deploying tighter stop-loss and take-profit levels without exceeding margin limits.
- Run more sophisticated algorithmic strategies that rely on bidirectional order placement.
- Rebalance portfolios more dynamically during volatile periods.
Moreover, users leveraging OKX’s grid trading, copy trading, or signal-based execution tools can now operate with greater capital agility.
👉 Start optimizing your strategy with smarter margin rules today
Final Notes and Risk Disclosure
Digital asset trading involves significant risk. Leverage amplifies both gains and losses and may result in total loss of capital. These changes improve efficiency but do not eliminate inherent market risks. Always conduct thorough due diligence and assess your risk tolerance before engaging in futures or leveraged trading.
OKX does not provide investment, tax, or legal advice. This article is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any digital asset. Product availability may vary by region. Please review the OKX Terms of Service and Risk Disclosure documents before trading.
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