Understanding Gradient Margin Requirements
The gradient maintenance margin ratio system establishes tiered margin requirements based on position size. Maintenance margin represents the minimum collateral percentage required to keep a position open. When a user's margin ratio falls below the maintenance margin plus liquidation fee threshold, forced position closure occurs.
Isolated Margin Calculation:
Margin Ratio = (Fixed Margin + Unrealized P/L) / Position Value
Position Value = Face Value × Contract Quantity / Latest Mark Price
Cross Margin Calculation:
Margin Ratio = (Balance + Realized P/L + Unrealized P/L) / (Position Value + Order Frozen Margin × Leverage)
Position Value = Face Value × Contract Quantity / Latest Mark Price
Why Exchanges Implement Tiered Margins
To mitigate market impact from large position liquidations and prevent substantial insurance fund losses, exchanges like OKX employ gradient maintenance margins. Key characteristics:
- Larger positions require higher maintenance margins
- Maximum allowable leverage decreases with position size
- Reduces systemic risk during volatile market conditions
Core Trading Concepts
Spot Trading (Coin-to-Coin)
The direct exchange of one digital asset for another across multiple markets including:
- Stablecoin pairs (USDT, USD)
- Crypto benchmark pairs (BTC, ETH, OKB)
Dogecoin (DOGE)
Originally created as a joke cryptocurrency in 2013, Dogecoin evolved into a legitimate digital asset with:
- Active community adoption
- Unique tipping culture features
- Litecoin-derived technical framework
Price Definitions
- Mark Price: Used for P/L calculations
Derived from spot index + basis point moving average - Index Price: Reference rate from major exchanges
- Order Price: Actual execution price on exchange
Advanced Trading Instruments
Options Contracts
OKX offers both simplified and professional trading interfaces for:
- BTC/ETH call/put options
- Flexible expiration strategies
- Advanced risk management tools
Specialized Crypto Categories
Grayscale Trust Assets
Digital assets held by Grayscale Investment Trusts including:
- Bitcoin (GBTC)
- Ethereum (ETHE)
- 9 other institutional-grade assets
FAQ Section
Q: How does gradient margin protect traders?
A: It prevents cascading liquidations by requiring larger positions to maintain higher collateral buffers.
Q: What's the difference between isolated and cross margin?
A: Isolated margin confines risk to individual positions, while cross margin shares collateral across all positions.
Q: Why do options contracts use mark prices?
A: Mark prices reduce unnecessary liquidations during temporary price dislocations between spot and derivatives markets.
Q: How often do margin requirements change?
A: Maintenance margins adjust dynamically based on position size and market volatility conditions.