Introduction to Multi-Currency Margin Trading
In multi-currency margin trading, users can transfer assets into a cross-margin account and trade across multiple markets—spot, margin, futures, perpetual swaps, and options—simultaneously. Assets in various currencies are converted into USD to serve as collateral for orders and open positions.
Key Features:
- Auto-Borrow Mode: If a user lacks sufficient balance in a specific currency but has enough USD-equivalent collateral, they can still sell assets or trade derivatives settled in that currency.
- Risk Calculation: All risks are measured in USD. If adjusted equity covers the maintenance margin for all positions, positions remain open. If not, partial or full liquidation occurs.
- Isolated Positions: Users can isolate risks using segregated positions.
Asset Management
Discount Rates
Assets in different currencies are converted to USD based on discount rates, which account for market liquidity. Current rates include:
| Currency Tier | Discount Rate |
|--------------|--------------|
| Tier 1 (e.g., BTC) | 100% |
| Tier 2 (e.g., ETH) | 97.5% |
| Tier 3 (e.g., USDT) | 95% |
Example Calculations:
1 BTC + 50,000 ZRX:
- BTC value: 1 × $50,000 × 100% = **$50,000**
- ZRX value: $0 (0% discount rate) → Total collateral: **$50,000**
11,000,000 USDT:
- Tier 1: 5M × 100% = $5M
- Tier 2: 5M × 97.5% = $4.875M
- Tier 3: 1M × 95% = $950K → Total: **$10.825M**
👉 Learn more about margin discount rates
Trading Rules
Cross-Margin Mode
- Collateral Pool: All currency assets contribute to a unified USD collateral pool.
- Auto-Borrow: Enabled by default. Users can trade even with insufficient balances, generating potential loans.
- Debt Rules: Negative equity in a currency triggers automatic debt creation, subject to interest.
No-Borrow Mode
- Users can only trade with available balances.
- If losses exceed a currency’s equity but total USD collateral suffices, passive debt is created. Interest-free if within limits; else, forced repayment (TWAP) occurs.
Example:
- Selling 20 DASH without sufficient DASH balance but with adequate USD collateral → Potential loan of 20 DASH (10% initial margin required).
Risk Management
Two-Tier Evaluation
Order Cancellation:
- Triggered when adjusted equity < maintenance margin + open order margins.
- Cancels pending orders to restore account safety.
Pre-Liquidation:
At 100% margin ratio, liquidation begins. Positions are closed incrementally:
- Offset opposing positions.
- Hedge delta-neutral positions.
- Liquidate remaining positions by effectiveness.
👉 Explore advanced risk settings
FAQs
Q: Can I disable auto-borrow?
A: Yes. In "No-Borrow" mode, trades use only available balances.
Q: How is liquidation prioritized?
A: System first offsets opposing contracts, then delta-hedges, finally liquidates high-maintenance-margin positions.
Q: What happens if debt exceeds interest-free limits?
A: Forced repayment (TWAP) activates, converting surplus assets to USDT to cover liabilities.
Conclusion
Multi-currency margin trading offers flexibility but requires careful risk management. By leveraging USD-based collateral and strategic hedging, traders can optimize cross-market opportunities while mitigating liquidation risks.
For real-time updates, visit OKX’s margin trading portal.