Introduction to Leverage Trading

Overview

Leverage trading in cryptocurrency refers to users borrowing funds using their account assets as collateral to engage in bidirectional trading. With up to 10x leverage, traders can amplify potential profits tenfold—though losses are equally magnified. This feature is available across all account modes, supporting both isolated and cross-margin trading in spot, futures, cross-currency, and portfolio margin settings.

How Leverage Trading Works

Borrowing Mechanisms

1. Market Borrowing

• When executing leveraged trades, users borrow assets from a pooled lending market, sourced from the platform’s flexible savings products.

• Borrowing limits depend on:

  • User tier limits
  • Asset-specific position tiers
  • Available liquidity in the savings pool (whichever is lower)

• Repayment options:

  • Buy back borrowed assets in the market.
  • Transfer owed assets (for cross-margin users).

2. VIP Loans

• Eligible users can access VIP loans, which may convert to market loans under certain conditions.
• Repayment rules vary; refer to OKX’s VIP loan terms for details.

Interest Calculation

• Hourly compounding: Interest on borrowed assets is calculated and deducted at the top of each hour (based on 10-minute minimum holding periods).
• Example: A loan taken at 10:55 PM accrues interest at 11:00 PM; repayment by 10:57 PM incurs no interest.
• Payments prioritize interest: Repayments first cover accrued interest before reducing principal.

👉 Learn how interest rates impact your trades

Auto-Conversion

• Triggers when assets are automatically swapped to repay debts, optimizing risk management.
• Rules vary by user/platform settings.

Tiered Leverage Rules

Each tier dictates:

• Maximum borrowable amount
• Allowable leverage (e.g., 10x)
• Maintenance margin rate
  Higher leverage reduces borrowing capacity—even with ample funds.

Risk Controls

Key Thresholds

1. Warning (300% margin ratio): System alerts suggest reducing positions.
2. Liquidation (≤100% margin ratio): Positions may be forcibly closed based on asset-debt ratios.

⚠️ High-leverage trades increase exposure to these risks.

FAQs

1. How do I repay a leveraged loan?

• Market orders or asset transfers (cross-margin only).

2. Can I use leverage in any account mode?

• Yes, including spot, futures, and portfolio margins.

3. Why did my borrowing limit decrease with higher leverage?

• Tiered rules cap borrowable amounts inversely to leverage multiples.

4. What happens during auto-conversion?

• Your positive balances are used to buy back owed assets.

5. How is interest deducted?

• Hourly, based on your outstanding loans at the time of calculation.

Disclaimer

This content is for informational purposes only and does not constitute financial, tax, or legal advice. Digital assets—including stablecoins—carry high volatility risk and may lose value. Leverage trading magnifies potential gains and losses, possibly resulting in total investment loss. OKX is not liable for trading decisions. Regional restrictions may apply; review our Terms of Service and Risk Disclosure for details.

© 2024 OKX. All rights reserved.

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