Margin Trading Glossary

This article aims to provide a glossary to explain all the commonly used terms in leverage trading. To access leverage trading, select the trading pair under Token Trading tagged with “3X” and select “3X Leverage” on the right hand side.

Assets

Total Assets: The total sum of tokens and fiat in your Margin Account for Spot, including available balance and balance on hold;

Transferred Assets: The amount of tokens and fiat transferred from other accounts to your Margin Account for Spot;

Borrowed Assets: Total Borrowed amount of tokens and fiat by using your available asset in Margin Account for Spot as collateral;

Available Assets: The total amount of tokens and fiat available for trading in Margin Account for Spot;

Assets on Hold: The amount of tokens and fiat which is unavailable for creating orders, usually refers to the tokens and fiat that are currently in use for open orders.


Leverage

Borrowing Limit: Max quantity of token or fiat available to borrow of the corresponding token pairs. OKCoin would determine the borrowing limit for a user with maximum leverage and other risk parameters;

Maximum Leverage Formula: Max leverage = (Total assets — outstanding loan — interest payable) * (max leverage multiplier — 1) — outstanding loan


Risk Ratio & Forced Liquidation

Risk Ratio: The indicator for evaluating margin account’s possibility of triggering forced liquidation. When risk ratio ≥150%, the surplus balance can be transferred out to Spot Account. When risk ratio ≤130%, it indicates a high-risk status, system will notify the user automatically via SMS. When risk ratio ≤110%, forced liquidation will be triggered and a SMS will be sent to notify the user;

Risk Ratio Formula: Risk Ratio = [(Total Assets (In Base Currency) — Interests Payable (In Base Currency) ) * Last Trade Price + (Total Assets (In Trading Currency) — Interests Payable (In Trading Currency)]/(Borrowed Assets (In Base Currency) * Last Trade Price + Borrowed Assets (In Trading Currency) ) * 100%

Forced Liquidation: When risk ratio ≤110%, forced liquidation will be triggered. All positions will be taken over by the platform and force closed in the market;

Margin Call Ratio: 110%

Estimated Price on Margin Call: A certain amount of margin is required for leverage trading in OKCoin. When unfavorable changes occur in the market, such as a reverse trend of market direction which contradicts the direction opened, the account balance may shrink below the perimeter, and system will force liquidate all holding positions at best bid /offer to pay off the debt;

Formula (Est. Price of Margin Call): Forced Margin Call Est. Price = (Borrowed Assets (In Trading Currency) * Risk Ratio + Interests Payable (In Trading Currency) — Total Assets (In Trading Currency) / (Total Assets (In Base Currency) — Interests Payable (In Base Currency) — Borrowed Asset (In Base Currency) * Margin Call Ratio)


Short

Short Selling: Selling of tokens which the user does not own, and buy back after a period of time.


Interest & Repayment

Interest Computation: Interests would be computed and incurred per each borrowing instruction. Interests would then be incurred once after the borrowed order is accepted and accrued per 24-hour intervals. Interests payable is compounded to next terms on each 15 days. (That is, unpaid interests expense would be computed as principal and thus incurring compounded interests);

Re-Payment: Re-payments will be used to cover the earliest loan orders, and pay-off interest before principal. The re-payment status will change to completed once all the debts have been paid-off, then further interest will not be applied for the order.