Leveraged trading in the cryptocurrency market allows traders to amplify their exposure and potential returns by borrowing funds. On platforms like OKX, coin-margined leveraged trading enables users to trade with up to 10x leverage, increasing both profit potential and risk. Understanding how to properly close a leveraged position is crucial for managing risk and securing gains. This guide walks you through everything you need to know about terminating leveraged trades on OKX—clearly, safely, and efficiently.
What Is Coin-Margined Leveraged Trading?
Coin-margined leveraged trading allows traders to borrow digital assets from the exchange using their existing holdings as collateral. This borrowed capital increases trading power, enabling larger positions than would be possible with personal funds alone.
For example, with $1,000 in your account and 10x leverage, you can control a position worth $10,000. While this magnifies potential profits if the market moves in your favor, it also increases losses if the trade goes against you.
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This form of trading supports both long (buy) and short (sell) positions:
- Going long: Borrow USDT or another stablecoin to buy more of a cryptocurrency expecting its price to rise.
- Going short: Borrow a cryptocurrency (like BTC or ETH) and sell it immediately, aiming to buy it back later at a lower price.
Profits are realized after repaying the borrowed amount plus interest, with the remainder being your net gain.
Key Use Cases for Leveraged Trading
Leveraged trading isn’t just for speculation—it can serve multiple strategic purposes in a trader’s toolkit.
1. Capitalizing on Bullish Markets (Long Positions)
If you believe a coin like Ethereum will increase in value, you can use your existing funds as margin, borrow additional funds (e.g., USDT), and purchase more ETH. When the price rises, selling your holdings allows you to repay the loan and keep the difference.
2. Profiting from Downturns (Short Positions)
When anticipating a price drop, you can borrow the asset (e.g., BTC), sell it at current prices, and repurchase it later at a lower cost. The savings minus interest equals your profit.
3. Simplified Workflow with Unified Account Mode
OKX’s unified account system streamlines the process. Previously, leveraged trading involved four steps: borrowing, buying/selling, selling/buying, and repaying. Now, it's reduced to just two:
- Open position (buy/sell)
- Close position (automatically triggers repayment of borrowed assets and accrued interest in single-currency margin mode)
In cross-margin mode, if liabilities remain after closing, interest is added to the debt balance and must be settled manually by purchasing the required asset.
Step-by-Step Guide to Performing Leveraged Trades
To begin leveraged trading on OKX, follow these essential setup and execution steps.
Step 1: Set Up Your Margin Mode
Before trading, configure your preferred margin mode:
- Go to Account Settings.
- Click on Account Mode.
Choose one of the following:
- Single-currency margin
- Multi-currency margin
- Portfolio margin
Read the details carefully before selecting your preferred model based on risk tolerance and portfolio structure.
Step 2: Transfer Funds to Your Trading Account
Move your base capital into the trading wallet:
- Option A: Navigate to Assets > Fund Transfer, then select source and destination accounts.
- Option B: From the leveraged trading interface, click the Transfer button directly.
Once funds are in place, you're ready to open positions.
Opening a Leveraged Position: Practical Examples
Let’s walk through two real-world scenarios using the ETH/USDT trading pair.
Example 1: Going Long Using USDT as Margin
- Open the ETH/USDT leveraged trading page.
- Select Buy ETH.
Choose:
- Margin mode: Isolated or Cross
- Order type: Limit/Market
- Margin type: USDT
- Leverage: e.g., 5x
- Quantity and price
- Click Buy ETH to place the order.
After execution, view your position under Positions. You can manage it via stop-loss, take-profit, or manual close.
Example 2: Going Short Using ETH as Margin
- On the same ETH/USDT page, choose Sell ETH.
Set:
- Margin type: ETH
- Leverage: e.g., 3x
- Desired quantity
- Confirm with Sell ETH.
The system borrows ETH from OKX’s pool and sells it for USDT. When you close the position later by buying back ETH at a lower price, the system automatically returns the borrowed coins and charges interest.
How to Terminate a Leveraged Position
Closing a leveraged trade correctly ensures accurate settlement and avoids unnecessary fees or residual debt.
In Single-Currency Margin Mode
When you close a position:
- The system automatically repays borrowed assets.
- Accrued interest is deducted from your margin balance.
- No further action is needed if the position is fully closed.
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In Multi-Currency or Cross-Margin Mode
After closing:
- Borrowed assets are returned.
- Interest may be recorded as part of your liability.
- If there's an outstanding balance, you must manually repay by buying the owed cryptocurrency in the spot market.
Always check your Liabilities section post-trade to ensure all debts are cleared.
Interest Rates and Fee Structure
Understanding costs is vital when using leverage.
- Interest accrual: Charged hourly at full hours (e.g., 00:00, 01:00).
- Deduction times: Daily at 08:00, 16:00, and 24:00 UTC.
- Rate variability: Depends on user tier and borrowed asset. Higher-tier users typically enjoy lower rates.
- No interest-free period: Unlike some platforms, OKX does not offer grace periods for leveraged borrowing.
You can view real-time borrowing rates under the Borrowing Rate Table in the leveraged trading section.
Frequently Asked Questions (FAQ)
Q1: Can I close only part of my leveraged position?
Yes. Partial closures are supported. When you reduce your position size, the system proportionally reduces debt and recalculates interest accordingly.
Q2: What happens if I don’t close my position?
Positions remain open until manually closed or until liquidation occurs due to insufficient margin. There’s no automatic expiry for standard leveraged trades.
Q3: Does closing a position immediately stop interest charges?
Interest stops accruing once the position is fully closed and repayment is processed. However, since interest is calculated hourly, minor prorated charges may still apply depending on timing.
Q4: How do I check my borrowing history and interest paid?
Go to Wallet > Transaction History > Borrowing & Repayment to view detailed records of all loans and associated costs.
Q5: Is leveraged trading suitable for beginners?
While accessible, leveraged trading involves significant risk due to amplified losses. Beginners should start with low leverage (e.g., 2x–3x) and practice risk management techniques like stop-loss orders.
Q6: Can I switch between isolated and cross-margin modes during a trade?
No. You must close existing positions before switching margin modes. Changing modes affects collateral distribution and risk parameters.
Final Tips for Safe Leveraged Trading
- Always monitor your margin ratio to avoid liquidation.
- Use stop-loss orders to limit downside risk.
- Avoid maxing out leverage—higher isn’t always better.
- Regularly review your liabilities and repayment obligations.
👉 Access advanced tools that help you monitor margins and close positions with precision.
By mastering how to open and terminate leveraged positions effectively, you gain greater control over your trading outcomes. Whether capitalizing on short-term volatility or hedging long-term holdings, OKX provides a robust infrastructure for confident leveraged trading.
Stay informed, trade responsibly, and let smart strategies drive your success.