Margin and Derivatives Trading Agreement

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Trading in digital assets through margin and derivatives platforms offers advanced opportunities for investors seeking to leverage market movements. This comprehensive guide outlines the key components of the Margin and Derivatives Trading Agreement provided by OKX Middle East Fintech FZE, detailing how users can engage with leveraged products such as margin trading, futures, options, and perpetual contracts. Designed for clarity and compliance, this document ensures traders understand their rights, responsibilities, and the operational mechanics behind high-performance trading strategies.

Understanding the Scope and Applicability

This agreement governs all services offered by OKX to users accessing its platform for margin and derivatives trading. It works in conjunction with the overarching Terms of Service, which remain fully applicable and are incorporated by reference. In cases of conflict, this agreement takes precedence, ensuring clarity for users engaging in complex financial instruments.

The services covered include:

Each product is designed to meet varying risk profiles and investment goals, with specific rules governing access based on user classification.

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User Classification and Compliance

OKX classifies users according to regulatory standards set by the Dubai Virtual Asset Regulatory Authority (VARA) into one of three categories:

Retail investors are restricted exclusively to Margin Trading, while qualified and institutional clients may access advanced derivatives products. Users must promptly inform OKX of any changes affecting their classification status to ensure continued compliance with applicable regulations.

Available Trading Services

Margin Trading: Amplifying Market Exposure

Margin trading enables users to borrow virtual assets or eligible fiat currency (USD or AED) to increase trade size beyond their initial capital. To initiate a position, users must deposit Initial Margin, which serves as collateral against potential losses.

Key features include:

Users are responsible for maintaining sufficient Maintenance Margin throughout the life of the position. Failure to meet these requirements may result in automatic liquidation.

Futures Contracts: Fixed-Term Agreements

Futures allow traders to lock in prices for buying or selling a specified amount of a virtual asset at a future date. These contracts expire on predetermined dates, with delivery occurring at settlement.

Notable provisions:

OKX acts solely as an intermediary, matching orders between counterparties without becoming a party to the contract itself.

Options Contracts: Rights Without Obligations

An options contract grants the holder the right—but not the obligation—to buy or sell an underlying asset at a set price on the expiration date. Upon expiry, in-the-money options are automatically exercised.

Key dynamics:

Perpetual Contracts: Open-Ended Derivatives

Unlike futures, perpetual contracts have no expiry date and are kept aligned with spot prices via a Funding Rate mechanism. This rate adjusts every 8 hours—at 04:00, 12:00, and 20:00 UAE time—and determines payments between long and short position holders.

Important aspects:

Trading Account Structure and Modes

To use OKX's services, users must fund their Trading Account with virtual assets or eligible fiat currency. The platform supports three operational modes:

1. Spot and Futures Mode

Positions are isolated by asset type—margin, profits, and liquidations apply only to the specific asset being traded.

2. Multi-Currency Margin Mode

All assets in the account are converted to USD equivalent for shared margin calculation. Profits and losses affect the entire portfolio, increasing efficiency but also interconnected risk.

3. Portfolio Margin Mode

Positions with the same underlying asset are grouped into risk units. Margin is assessed holistically, potentially reducing capital requirements for diversified positions.

Access to Multi-Currency and Portfolio Margin Modes requires a minimum net equity of $10,000, calculated using prevailing exchange rates at OKX’s discretion.

Additionally, users may opt for Isolated Margin mode, limiting exposure per position regardless of account mode.

Risk Management: Margin Ratio and Early Warnings

The Margin Ratio—calculated as equity divided by Maintenance Margin—reflects account health. A declining ratio signals increased liquidation risk.

OKX provides Early Warning Notifications when the margin ratio drops below 300%, though users may choose lower thresholds (150% or 200%) at their own risk. Notifications are delivered via the user’s preferred channel (app, email, or website), but failure to receive them does not absolve responsibility.

It is each trader’s duty to monitor their positions actively and respond promptly to margin calls.

Liquidation, Insurance Fund, and Auto-Deleveraging

Liquidation Process

If the Margin Ratio reaches or falls below 100%, OKX reserves the right to fully or partially liquidate positions. Actions may include:

A liquidation fee may apply, and users remain liable for any resulting negative balances.

Insurance Fund

When liquidations fail to cover losses, OKX may draw from its Insurance Fund—a segregated reserve of virtual assets—to offset deficits. However, during extreme market volatility, this fund may be depleted, leaving users liable for unpaid balances.

Auto-Deleveraging (ADL)

If the Insurance Fund drops by 30% within 8 hours, Auto-Deleveraging is triggered. During this period:

ADL disables when either:

Fees, Payments, and Tax Responsibility

OKX charges fees for opening, closing, and liquidating positions. These include:

A complete fee schedule is published on the platform and subject to periodic updates. All fees are deducted automatically from the user’s margin account.

Additionally, applicable taxes—including VAT—are charged separately and displayed on invoices. Users agree to bear all tax obligations arising from their trading activity.

Frequently Asked Questions (FAQ)

Q: What happens if I don’t maintain enough margin?
A: If your Maintenance Margin falls too low, OKX may issue a warning or proceed with liquidation if your Margin Ratio hits 100%. You’re responsible for monitoring your account at all times.

Q: Can I lose more than my initial investment?
A: Yes. If market movements cause losses exceeding your deposited margin and the Insurance Fund is depleted, you may owe additional funds to OKX.

Q: Are perpetual contracts settled like futures?
A: No. Perpetuals don’t expire but instead use periodic funding rate payments every 8 hours to align prices with the spot market.

Q: Who sets the leverage amount I can use?
A: OKX determines leverage levels at its sole discretion, based on market conditions and regulatory requirements. Leverage may be adjusted anytime.

Q: How do I avoid being auto-deleveraged?
A: Reduce your position size during volatile markets, especially if holding highly profitable trades. ADL targets top-tier profitable positions first.

Q: Is my data protected under this agreement?
A: While not detailed here, data protection follows OKX’s Privacy Policy and VARA-compliant practices. You retain ownership of personal information.

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Final Provisions

Users receive monthly account statements through the platform and maintain real-time visibility over open positions and margin levels. All payments due—fees, taxes, or liquidation costs—are immediately payable upon trade execution and deducted automatically.

OKX reserves the right to amend this agreement or terminate user access at any time. Users must settle all liabilities before closing their trading accounts.

This agreement does not override other contractual relationships with OKX, including the core Terms of Service. Compliance with all applicable laws—including VARA Rules—is mandatory for continued access to services.

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