OKX Margin Trading Tutorial for Beginners (Step-By-Step)

[00:01] trade using margin on OKX, including what margin actually is, how to open and margin if you're taking that. I'll leave timestamps for everything below. I'll able to get a bonus via that link when

[00:14] trading is on OKX, and I can compare it to futures trading, which is the two ways that you can trade with the leverage on OKX. So, you can open a that you have on the platform. When you trade on margin, you borrow money to

[00:29] trade spot. So, you're actually buying and selling the assets with borrowed money. With futures, all you're doing is trading a synthetic price feed, and And so, the way that you take leverage is different. So, let's say that I've

[00:43] got a $1,000 of cash on the platform. With margin, let's say that I want to open a $5,000 Bitcoin trade. Well, what I would have to do is borrow on the platform. Then I could buy $5,000 of Bitcoin.

[01:01] So, I have $5,000 of Bitcoin here. But I also have a $4,000 debt, right? So, what I can do, if I want to pay off the debt and pay off the margin and everything else, I can sell the Bitcoin,

[01:14] pay the $4,000 debt, and I have $1,000 left over, which is my original cash minus any fees. Or, what I can do is literally deposit the cash on the is literally deposit the cash on the platform

[01:31] Then, the debt is gone. I paid the debt with cash, and I still have the asset. can withdraw it from the platform. So, that's what you can do on margin. With futures, it's completely different. Futures

[01:45] is a synthetic price feed. You're not trading the asset at all. I still have $1,000, but I can open a $5,000 trade.

[02:00] traded the asset. It's a synthetic price. I opened a long trade on Bitcoin. So, I'm synthetically long. All right, I benefit when the price goes up. The way that I get my $1,000 cash back is to sell and

[02:14] close the trade. So, if I sell and close the trade, I make a profit or a loss. So, I either get some more cash in my account. That's it. You never have the have the Bitcoin.

[02:27] >> You can't really pay off the trade because you will always have the trade open until you close it. So, the only way you kind of get back to not having any risk exposure or anything is to

[02:39] profit or a loss. Now, you can reduce your leverage, so you can add more cash to the trade which reduces your leverage because you're buying more of the trade. But, the way that you get out is by

[02:52] Now, the effect is the same on both. You have a $1,000 of cash in your account if you don't add in anything. if you open a $5,000 trade, that means that you have $1,000 to pay

[03:08] for that position, right? If the $5,000 trade falls by 20%, it falls $1,000. Therefore, you have no cash left to service your debts, right? So, what OKX will do is liquidate your account, meaning they will sell out your trade

[03:23] for you and pay off the debts. So, when you use leverage, what you're doing is increasing the risk of loss because the volatility, the downside volatility that you can handle isn't 100%. If I had $1,000 cash, $1,000 trade, I bought

[03:36] $1,000 of Bitcoin, that's mine forever. It can go to zero. I still have the asset. But, if you've got a $1,000 cash to open a trade, if you've got a $5,000 trade, 20% down is a $1,000 loss, then OKX is going to say,

[03:50] "Look, you don't have any more cash to pay for this. We're going to get out of your trade for you, right?" And either way, if you lose 20% of the trade, with margin, the difference is you can actually just simply buy the

[04:04] Bitcoin, and that's it. With futures, what you'd have to do is put more cash be open. So, it's a little bit different. You either want to trade margin where you're borrowing money to buy and sell assets, or you want to

[04:16] trade futures, which is simply more for shorter-term trading where you're funding trades, and you either make a profit or a loss. If margin trading is automatically be able to trade it. Uh

[04:28] here as well, just below my head. You can see right here. Click this. Go into account mode, and you can choose. Now, spot mode lets you trade spot and margin. So, that's fine. You can borrow money to buy spot. If you

[04:41] switch over to futures mode. But just note that when you trade futures mode, any collateral that you have in your account to fund your positions will be futures positions together. So, you have to figure out your total account margin.

[04:57] Right. So, what we do is we put cash in the account to fund our positions and our debt if we're using margin or futures positions, we have leverage. And all of those positions will be used together to work out your account

[05:09] equity. Your account equity is what are your positions. If you're making profits in the positions, your account has equity because those can be liquidated immediately, right? And so, if you've got lots of profits in your positions,

[05:22] You're basically making profits. So, that's fine. But if you're making losses in those trades, then the cash that you have on OKX is to be used for all of those positions simultaneously, margin positions and

[05:35] futures positions. So, you have to make sure that one isn't lots of margin positions and they're doing great, but then you open a future trade and that loses a lot of money, it can contaminate your other positions,

[05:48] fund your losses as well. So, you just have to make sure that if you are opening both futures and margin, you know exactly that the collateral is once. Now, I'll show you how to borrow on OKX, and you can do this before you

[06:01] show you both options. So, you come to the borrow repay tab here. You can sort you want to borrow. So, what OKX are going to do now account, and they're going to see the assets in there and what they're worth.

[06:17] And they're going to use that as the calculation on how much you can borrow. account or your earn account or anything else, they're completely separate from this. If you want to borrow against some

[06:29] put it in your trading account. What can you use? USDT, USDC. You can actually use crypto assets as well. And let's say you've got some Bitcoin in there, you've got some USDT in there. That's fine. If you have, let's say, $1,000 worth of

[06:43] assets, they will say, "Great. You have $1,000 worth of assets right now. You Now, if you're using cash to borrow against, like if you've got USDT in then you've got $1,000, you know that's $1,000. It's going to be really easy to

[06:58] would need to pay back. If you've got crypto as collateral in there, like Bitcoin, you may have $1,000 worth now. That can change over time, and that's say you're borrowing against your Bitcoin, and Bitcoin goes up in value,

[07:13] that's great. You're basically paying for the loan, right? But if Bitcoin goes down in value, then you've actually got less collateral there to pay. So, it's up to you what you want to use, uh whether you use just cash or whether

[07:26] you use crypto assets. This is where leverage comes in as well. So, leverage, what is it? Leverage is the amount of the loan versus your assets. So, let's say I've got $1,000 of cash.

[07:39] 10x leverage means I borrow $10,000. 10x my cash, right? So, $1,000 cash, $10,000 loan, that's 10x leverage. A 2x leverage is $1,000 cash, $2,000.

[07:52] Right, so I've got borrowed $1,000, I've now got $2,000 in my account. That's 2x my cash. The only difference with leverage is that it just matters if you have a trade open. So, if I've got 10x leverage position

[08:05] and the trade falls by 10%, my cash is wiped out. 10% of 10,000. So, I've completely wiped out my cash. If I've got a 2x leverage trade, $2,000 position and $1,000 cash, I can afford a 50% drop. So, the more leverage you take,

[08:21] the more at risk you are of a small price drop wiping out the cash that you have. How do you decrease your leverage? Well, you either get out of the trade and reduce your trade size in relation to

[08:34] your cash, or you increase your cash. And that means you're just paying for the trade, reducing the leverage, reducing the position size in relation well.

[08:46] It doesn't actually matter what the leverage is matters specifically how much you borrow. So, let's say that I I've got borrow. So, let's say that I I've got $200 two 200 USDT in my account. And I

[09:01] can say to OKX, I want to use 10x leverage. But, if I borrow another $50, I'm not using 10x leverage, am I? Because, what you have to figure out is my account has what assets? Cash, Bitcoin, any other

[09:16] crypto asset. How much is that in value? And how much am I borrowing? So, you can doesn't really matter. What you have to do is work it out on an account level. How much am I borrowing in relation to how much assets I have?

[09:30] Your leverage is also going to change dependent on your trades. Like, if you have trades open and they win, you've got account equity now, your effective account leverage actually moves down. If your trades lose, your effective

[09:43] leverage trade size in relation to assets starts to get worse, right? So, something you have to balance all the time. But, if you want to go ahead and borrow here, just choose how much you want to borrow

[09:55] like this. And also, you want to check out the current APR, which of course is are borrowing cash here. So, if you're borrowing money, you have to pay an interest rate. The APR is 2.5%. So, not

[10:08] bad, right? A yearly rate of 2.5% to borrow is is pretty good. This will be charged, I think, every few hours or so, maybe every hour or so. Um not to right, 2.5% is the annual rate. You'll be charged every hour uh a tiny

[10:21] you have to manage that as well. Make sure you have cash in your account to So, we can check that. If we want to borrow, let's say borrow here. And that's borrowed. So, I now have a $100 debt. Right, this is the loan that

[10:36] I have. And my current interest rate 2.5%. If I want to repay this, then I can go ahead and do that right here. And how do you repay? Well, you're going to need USDT in your account. If you don't have any, maybe you have some

[10:50] other assets, you need to sell those into USDT cuz I've got a USDT loan here now, so I need to pay that off plus the interest. I can just deposit fresh cash into the account, make sure it's USDT, I can repay it. I'll just show you how to

[11:03] repay here. Notice that the borrow that I've got is totally fine in terms of my estimated risk. I don't have any trades, and I've actually got more cash in my account. I have $200 in the account. So, yeah, there's no uh

[11:16] potential of, you know, bad debt for OKX or anything. So, we're going to repay. this and potentially some interest and everything else. So, you can see that I have now $300 in my account. I have $200 cash

[11:29] plus the $100 loan. So, I now have $300. So, let's confirm this, pay it off. That loan. And you can see that in my account now,

[11:41] I have basically my $200 back minus the fee. All right, so USDT balance $200 right here. You see that? So, what happened is I had $200. I borrowed another $100. Now I've

[11:56] paid it off and back to $200. The other way to open a borrow is to do so when trading. So, let me show you how this works. I'm trading Bitcoin USDT. I'll be a buyer right here. And we're going to open a market order.

[12:08] And we're going to open a market order. Notice that in my account I have $200. Bitcoin. Notice that the amount borrowed is zero. OKX is not going to automatically borrow

[12:20] any money. I don't need to. I have $200 in my account and I only want to open a $100 trade. Now, let's say that I want to open a $300 trade. Notice it works out that I need to borrow $100. So, I'm going to borrow

[12:34] $100 here. And I'm going to spend the $200 and I'll get $300 of Bitcoin. So, I'm going to go ahead and margin buy like this. It automatically does it for me. Now, that's it. I've I've opened the trade

[12:48] In my assets right here, notice now I've clicked this only show What I've done, I now have no cash in my account.

[13:00] And I actually have a $100 debt in USDT as you can see here. But what I also now, is I have an amount of Bitcoin. So, what I have, essentially, is $300 of Bitcoin now and a $100 debt.

[13:17] So, I'm $100 down. So, how can I repay this? Well, the way that I can repay this is on the right-hand side, you can see the repay button here. What would I have to do? I have to get

[13:30] the USDT in my account now to pay off that loan. Well, the only thing I can do is sell an amount of Bitcoin. How much Bitcoin do you want to sell? Well, I only have to sell the amount of the borrow, which is $100. So, if I

[13:43] wanted to repay this loan now, I can do. What will happen is I'll sell the Bitcoin into USDT and pay off the $100 debt. What I will keep though is the other $200. Now, before this trade, I had $200 cash.

[13:58] Bitcoin. Uh so, that's my asset now. I have swapped the asset already. So, if I want to repay this loan, what I can do here is go to repay all available. What this will do if I press confirm is sell my

[14:13] Bitcoin, liquidate my Bitcoin. Now, what you can do is go to the sell tab and you can sell the Bitcoin yourself if you want. Right, that's going to uh have some cash in your account. It won't automatically repay the loan. It

[14:26] will just sell for cash. And if you want to pay the loan back, you can do. Or if So, what we're going to do is repay it right here. So, if you pay press repay, uh I'm going to have this asset right here. It's the only asset in my trading

[14:40] account that's available. I don't have any cash. So, I can repay this loan and it's going to sell the exact amount. So, I can press confirm here. That will repay the loan as you can see. Now, I don't have a loan, but I've

[14:53] repaid the cash loan of $100. I still now have that $200 right here, but it's in Bitcoin now because I actually bought the Bitcoin. So, you can borrow to buy the Bitcoin, you can pay it off. Now, you can sell that Bitcoin

[15:07] right here to pay off the loan if you want. Or if you want to keep the Bitcoin that you have, you just need to pay off the loan. What you can do is go down here to transfer and you can just transfer in cash. You

[15:21] can transfer in your and then you can pay off the loan that with the cash and keeping the Bitcoin. It's not just cash that we can borrow on margin either. We can actually borrow risk assets. So, this is where you can

[15:34] actually go short the asset itself. So, if you're borrowing cash to buy Bitcoin, let's say, what you're doing is going short cash. Right, you don't have enough cash here and you have a cash liability that you have to pay for and the Bitcoin

[15:48] can go up in value which is fantastic cuz you're trading with leverage now, so the loan from the Bitcoin going up in value, but if the Bitcoin goes down in have to find the cash from somewhere, right? You're losing money.

[16:02] The other side of that is that you can borrow the asset as well. So, you can actually be short Bitcoin. Right? And that's where you can sell on margin. So, your liability here now is to deliver the Bitcoin back cuz if we're borrowing

[16:17] Bitcoin, we have a loan, right? And so, we're going to have to pay that Bitcoin back at some point. Now, if you borrow Bitcoin and the price of it falls, you make money cuz you're borrowing up here at

[16:30] this exchange rate and then you want to obviously pay it back when the exchange rate is lower, which is great. So, we can borrow the Bitcoin if the price falls, then we can pay back the loan and we actually make money. So, you're going

[16:42] short the asset. Now, if you're short the asset and the price rises, that's Bitcoin, so you don't have the Bitcoin, you have a debt of Bitcoin and then the exchange rate to dollars rises, then you're going to have to buy that Bitcoin

[16:56] you lose money, right? So, when you go short an asset, falls. You're borrowing it and you want to deliver it back a lower price. If the price rises, then obviously that's not good for us. We're going to have to buy

[17:12] the Bitcoin at a higher price, high exchange rate in the future and then we would have to deliver it. So, you can go short again. The complete opposite, I'm going to market sell here now. Now, notice that I've got basically $200 of

[17:26] Bitcoin here, which is what we bought. And I have no, you know, long leverage that loan. So, I've now got $200 of Bitcoin, but I can sell more than this.

[17:38] If I sell $200 here, what I've done here is just click down to trade everything in USDT, so I know how much I'm trading. You can do amounts work out the decimals of Bitcoin. It's It's too difficult. So,

[17:51] total USDT, $200. Notice that I will not be borrowing I'm actually borrowing a tiny fraction here, cuz I have slightly less than $200, right, after fees. But, let's say that this is I've got $200 of

[18:03] Bitcoin. Just going to click off margin. What I want to do is, you can see I've What I want to do is, you can see I've got 199.55. So, I can sell this Bitcoin, Bitcoin that I sell, and I'll get dollars back. Or, if I turn on margin,

[18:19] I can actually sell more than I have. I can sell $300 of Bitcoin. Notice now I'm borrowing this amount of Bitcoin. So, I now will have a debt in Bitcoin Let's go ahead and do this. I can margin sell.

[18:35] see what I'm borrowing is Bitcoin itself. So, I will now have to deliver this Bitcoin in the future to pay off the And if I don't have any Bitcoin myself, how do I get this Bitcoin? Well, I'm

[18:48] market, and then deliver it. Now, what I want to happen is the exchange rate falls, so I spend less dollars in the future to buy this Bitcoin that I just sold, and that would be a profit for me.

[19:01] If the price rises, I'm in trouble, cuz I have to spend way sold it for. So, if I want to now repay this, I can go to repay again. Notice that I have $300 in my account now. So,

[19:16] I'm $100 short of the Bitcoin and have $300 cash, but I want to now trade the Bitcoin back. Press confirm. That repays the Bitcoin loan. And again, I should have more or less $200 in the account once that trade

[19:31] after a small amount in fees, I've got the $200 back. If you need a full know how to trade futures, I'll leave those videos down in the description well if you want to sign up. I believe you can get a bonus via that link as a

[19:45] watching, and I'll see you in the next one.