Multi-currency margin mode vs. Portfolio margin mode
Introduction
As a leading derivatives exchange, OKX strives to provide our users with the best-in-class margin infrastructure. To further enhance how users utilize capital, the OKX unified account has iterated from Single-, Multi-currency margin to the latest Portfolio margin.
For details on multi-currency margin and portfolio margin, refer to the following:
Key Concepts
Dimension | Term | Explanation | Parameter in Get balance |
|---|---|---|---|
Basic concepts that apply to both account modes | Equity | The total assets of a certain crypto in the cross-margin account and isolated positions. Equity = Balance in the cross-margin account + Floating PnL in cross-margin positions + Margin balance in isolated positions + Floating PnL in isolated positions + Options market value - Accrued interest | eq in the details array |
Free margin | The margin amount of a certain crypto that can be used for trading margins, expiry futures, perpetual futures, and options (short positions) trading. Free margin = Max (0, Crypto balance in cross margin + Floating PnL in cross-margin positions – In use) | availEq in the details array | |
Available balance | The amount of crypto that can be used for isolated positions, spot, and options (long positions) trading. Note: This description is for order calculation only and will not be displayed as a field on the platform. | availBal in the details array | |
Floating PNL | The sum of the floating PnL of all margin, futures, and options positions that are settled with a certain crypto, including positions under cross and isolated margin mode. Floating PnL = Floating PnL of cross-margin positions + Floating PnL of isolated margin positions Floating PnL of cross-margin positions = Floating PnL of cross-margin expiry futures positions + Floating PnL of cross-margin perpetual futures positions + Floating PnL of cross-margin options positions Floating PnL of isolated margin positions = Floating PnL of isolated margin positions + Floating PnL of isolated expiry futures positions + Floating PnL of isolated perpetual futures positions + Floating PnL of isolated options positions. | upl in the details array | |
Account equity | The fiat value of all cryptocurrencies in your account. Total equity = Sum (Crypto equity × Crypto price) | totalEq | |
Margin level | Margin level = Adjusted equity / (Maintenance margin + Liquidation fees) Maintenance margin and liquidation fees are calculated using the sum of open positions and open orders | mgnRatio | |
Maintenance margin requirement (MMR) (non-portfolio margin mode) | The margin required to maintain current positions. Used to evaluate whether or not to start the liquidation process. | mmr | |
Portfolio margin mode key concepts | Maintenance margin requirement (MMR) (portfolio margin mode) | MMR is determined using risk units, where all instruments (futures, options, and spot under the spot-derivatives risk offset mode) are grouped by underlyings to simulate the maximum loss that can occur in a portfolio under a specific set of market conditions. The USD-value of the individual MMRs will then be summed up into a portfolio MMR (in USD value). Portfolio margin consists of a derivatives margin and a borrowing margin. The derivatives margin under each risk unit and the borrowing margin are added up to obtain the portfolio margin level. MMR = Sum of USD value of each risk unit derivatives MMR + Account level Borrowing MMR = Max {[Max (Spot shock, Theta decay risk, Extreme move) + Basis risk + Vega risk + Interest rate risk], Adjusted minimum charge} | mmr |
Risk factor (MR) | Derivatives margin calculates 6 risks (MR1-6) by stress testing the portfolio under a specific set of market conditions of each risk unit, and then applying the minimum charge (MR7). The minimum charge is designed to cover any liquidation fee, transaction cost, and slippage. | N/A | |
Risk unit | All derivatives are grouped into risk units based on their underlyings (e.g. BTC-USD, BTC-USDT, ETH-USD, ETH-USDT, etc). | N/A | |
Spot in use | Under spot-derivatives risk offset mode, spot in use (how much spot is used under the risk unit) is determined by the delta of derivatives that belong to the same risk unit. | spotInUseAmt in the details array | |
Spot-derivatives risk offset mode | Under spot-derivatives risk offset mode, traders can choose to place spot trades in either USDT or crypto-margined risk units. | spotOffsetType found in Get account configuration | |
Scenario-based margin calculation | Compared with single-currency and multi-currency mode, we adopt a more scientific and rigorous risk model: maintenance margin is calculated from stress test values in 8 dimensions. Traders who have large positions or who are doing risk hedging can enjoy considerable discounts on their margin requirements. |
Table about risk unit
Mode | BTC-USDT Risk Unit | BTC-USD Risk Unit |
Derivatives-only | BTC-USDT expiry and perpetual futures | BTC-USD futures, options |
Spot-derivatives (USDT) | BTC-USDT expiry and perpetual futures, BTC | BTC-USD futures, options |
Spot-derivatives (crypto) | BTC-USDT expiry and perpetual futures | BTC-USD futures, options, BTC |
Comparison of Multi-currency Margin Mode and Portfolio Margin Mode
Account mode |
Multi-currency margin（leverage:5x） |
Portfolio margin 1.0 (Derivatives-only mode) （leverage:5x） |
Portfolio margin 2.0 (Spot-derivatives risk offset mode) （leverage:5x） |
|---|---|---|---|
Tradable instruments |
All instruments (spot, margin, perpetual swap, futures, and options) |
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Prerequisite |
Equity > 10K USD |
Equity > 10K USD |
|
Applicable collaterals |
All assets in trading accounts can be used as collateral, by valuing them in USD equity upon a tier-based discounting. (Discount rate) Unrealized P&Ls in derivatives positions can be used as equity in corresponding assets (known as P&L offset). |
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Treatment of option value |
Long option positions are placed in isolated mode. Only short option positions are considered as available margin in cross-margin mode. |
Both long and short options can be evaluated in cross-margin mode; therefore, the values of both are considered as available margin in cross-margin mode. |
|
Position margining |
Positions in different instruments are independently margined based on position tiers. (Position tiers) |
Derivatives positions are grouped by risk-unit. Their risks are assessed holistically under different scenarios (V. Portfolio Margin mode), and the required margin is calculated based on the maximum loss in all scenarios. |
Derivatives positions are grouped by risk-unit. Their risks are assessed holistically under different scenarios (V. Portfolio Margin mode), and the required margin is calculated based on the maximum loss in all scenarios. Additionally, the delta position from spot assets can be included in the corresponding risk units (either USDT-margined or crypto-margined). e.g., BTC spot assets in an account can be included in a BTC-USD or BTC-USDT risk unit for delta risk offsetting. |
Example of Multi-currency Margin Mode vs. Portfolio Margin Mode
Assets | 148 ETH |
Positions | -30,000 ETH-USDT-SWAP 20,000 ETH-USDT-0930 |
Multi-currency margin | MMR = 7,947 USD |
Portfolio margin 1.0 (only-derivatives risk offset) margin | MMR = 33,665 USD |
Porfolio margin 2.0 (spot-derivatives risk offset) margin | MMR = 9,618 USD (spot in use = 100 ETH) |
Optimization on MMR (Portfolio margin 1.0 -> Portfolio margin 2.0） | Save 70% |
Conclusion | In portfolio margin mode, users with larger assets, offsetting position structures, and spot positions will receive a smaller MMR and more flexible funds. In some scenarios, Portfolio margin 2.0 MMR is better than multi-currency margin MMR, which optimizes MMR calculation in small holdings. |
Tools to help you understand the different account modes
Demo trading
Multi-currency margin mode
Trade > Settings > Account mode > Multi-currency margin mode (Net equity must be > 10,000 USD)
For details on the equity, MMR, and margin ratio in cross-margin mode, refer to the following: Multi-currency margin mode: cross margin trading
Portfolio margin mode
Trade > Settings > Account mode > Portfolio margin (Net equity must be > 10,000 USD)
Choose whether or not to turn on Spot-derivatives risk offset, then observe your spot hedging amount in the Positions and Assets tabs (the first time you enter, the default derivatives type will be USDT mode):
For details on the equity, MMR, and margin ratio in portfolio margin mode, refer to the following: Portfolio Margin mode: cross margin trading
Position builder
Link: https://www.okx.com/trade-position-builder
You can simulate new positions in position builder to see the IMR and MMR, as shown below. Additionally, you can include existing positions with simulated positions to simulate the impact on IMR and MMR:
