How to Choose Leverage and Distinguish Isolated/Cross Margin in OKX Contracts

Understanding Margin and Leverage

In futures trading, you'll notice the leverage multiplier and account mode settings next to the contract name. Leverage amplifies both your potential profits and risks by increasing your trading capacity beyond your initial capital.

When trading with leverage, you must deposit a percentage of your trade value as collateral - this is called margin. OKX offers two margin types:

1. Coin-Margined Contracts: Use the underlying cryptocurrency (e.g., BTC) as collateral
2. USDT-Margined Contracts: Use USDT stablecoin as collateral

The trading interface allows you to:

• Set leverage via numerical input or slider

• View real-time calculations of:

  • Maximum position size (in coins or contracts)
  • Required margin for your current positions

Important Note: Increasing leverage may initially raise your "maximum position" until it hits the position tier limit (visible in the "Position Tier Explanation" sidebar). Beyond this point, higher leverage will reduce your maximum position size according to tier restrictions.

Margin Calculation: Isolated vs. Cross Margin

OKX provides two account modes with distinct margin mechanisms:

Cross Margin (全仓模式)

• Uses all available funds in your contract account as collateral

• Margin formula:

  Contract Face Value × Quantity / (Mark Price × Leverage)

• Margin adjusts dynamically with mark price changes
• Lower liquidation risk when not fully leveraged

Isolated Margin (逐仓模式)

• Each position (long/short) maintains separate margin pools

• Margin formula:

  Contract Face Value × Quantity / (Entry Price × Leverage)

• Fixed margin amount after opening

• Recommended for:

  • Independent position tracking
  • High-leverage trading with risk isolation

Key Difference: During liquidation:

• Isolated margin: Only loses the position's allocated funds
• Cross margin: Loses all account funds for that contract type

Nominal Leverage vs. Actual Leverage

1. Nominal Leverage:

   • The selected multiplier in your trading interface
   • Determines maximum position size and required margin

2. Actual Leverage:

   • Real risk exposure calculated as:

     Position Value / Used Margin

   • Represents true risk magnification

Calculation Methods:

For Isolated Margin:

Actual Leverage = Nominal Leverage

For Cross Margin:

When fully leveraged (100% position):

Actual Leverage = Nominal Leverage

When partially leveraged:

• Coin-Margined Contracts:

  Actual Leverage = (Contracts × Face Value) / (Last Price × Account Equity)
  OR
  Coin Quantity / Account Equity

• USDT-Margined Contracts:

  Actual Leverage = (Contracts × Face Value × Last Price) / Account Equity
  OR
  (Coin Quantity × Last Price) / Account Equity

Example:

• Cross margin, 10× nominal leverage

• Maximum position: 1,000 contracts

  • At 1,000 contracts: Actual leverage = 10×
  • At 300 contracts: Actual leverage = 3×

FAQ Section

Q1: When should I use isolated margin?

👉 Isolated margin suits traders wanting position-specific risk management, especially when using high leverage or testing strategies on separate positions.

Q2: Does higher leverage always mean higher risk?

While higher nominal leverage increases potential gains/losses, your actual risk depends on position size. A small position with high nominal leverage may have lower actual risk than a large position with low leverage.

Q3: How do I choose between coin-margined and USDT-margined contracts?

Coin-margined contracts expose you to the underlying asset's price volatility in both your position and collateral. USDT-margined contracts provide stable collateral valuation but may have slightly higher funding rates.

Q4: Can I change margin modes after opening a position?

Margin mode changes typically require closing existing positions. Always check OKX's latest interface for current functionality.

Q5: Why does my maximum position size decrease at higher leverage levels?

This occurs when your margin-supported position size exceeds the exchange's position tier limits for that leverage level. The system automatically restricts you to the tier's maximum.

Q6: How does mark price affect cross margin positions?

In cross margin, your available collateral fluctuates with mark price movements. Significant price drops may reduce your collateral value faster than in isolated margin mode.

👉 For optimal leverage strategies, OKX provides detailed tutorials and risk management tools to help traders navigate volatile markets effectively. Always practice with small positions when testing new leverage approaches.