Understanding Contract Trading
Contract trading is a powerful financial instrument that allows traders to hedge against market volatility or speculate on price movements. While it offers opportunities for significant profits, it also carries inherent risks. Like a double-edged sword, its effectiveness depends entirely on how it's wielded by the trader.
OKEx offers three main types of contract trading:
- Perpetual Contracts
- Futures Contracts
- Options Contracts
The perpetual and futures contracts are further divided into USDT-margined and coin-margined variants. This guide focuses specifically on perpetual contract operations.
Preparing for Contract Trading
Before executing any contract trades, you must complete two essential steps:
1. Fund Transfer
- Open the OKEx app
- Navigate to [Assets] → [Fund Transfer]
- Select USDT (or your preferred currency)
- Transfer from [Funding Account] to [Trading Account]
- Enter the amount and confirm
2. Account Configuration
- Click the profile icon in the top-left corner of the trading page
- Select [Account Information] → [Trading Settings]
Configure:
- Account mode (cross/isolated margin)
- Trading unit
- Order type (buy/sell or open/close mode)
Perpetual Contracts Explained
OKEx perpetual contracts are settled in cryptocurrency and have no expiration date, allowing continuous trading. These contracts enable both long (buy) and short (sell) positions to profit from market movements.
Opening a Long Position (Bullish Strategy)
When anticipating price increases:
- Select [BTC/USDT] in the trading pair box
- Choose [Perpetual] → [USDT Contracts] → [BTCUSDT Perpetual]
Set:
- Margin type (cross/isolated)
- Order type (limit/market)
- Leverage multiplier
- Entry price and quantity
- Click [Buy (Long)] and confirm
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Closing a Long Position
You can close positions through:
- The trading page, or
- The specific position page
Position page method:
- Go to [Positions]
- Select the position to close
- Choose [Close Position]
- Enter price/select market price
- Input quantity
- Confirm closure
Alternative methods:
- Set [Take Profit/Stop Loss] orders
- Use [Market Close All] for immediate full closure
Opening a Short Position (Bearish Strategy)
When anticipating price decreases:
- Follow the same initial steps as long positions
- Instead of [Buy], select [Sell (Short)]
- Confirm the trade
Risk Management Tips
- Always use stop-loss orders to limit potential losses
- Start with lower leverage until comfortable
- Never risk more than you can afford to lose
- Monitor positions regularly
- Consider hedging strategies during volatility
FAQ Section
What's the difference between perpetual and futures contracts?
Perpetual contracts have no expiration date, while futures contracts settle at predetermined dates (weekly, quarterly).
How does leverage work in perpetual contracts?
Leverage allows controlling larger positions with less capital. OKEx offers flexible leverage options, but higher leverage increases both potential profits and risks.
Can I switch between cross and isolated margin?
Yes, you can adjust margin modes in your account settings, but existing positions may need to be closed first.
What happens if my position gets liquidated?
When your maintenance margin is insufficient, positions automatically close to prevent further losses. Liquidation prices vary by leverage and margin type.
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How are funding rates calculated?
Perpetual contracts use periodic funding payments between long and short positions to maintain price alignment with spot markets. Rates vary by market conditions.
Can I trade perpetual contracts on mobile?
Yes, OKEx offers full contract trading functionality through its iOS and Android apps with the same features as desktop.
Advanced Trading Strategies
For experienced traders:
- Hedging: Open offsetting positions to protect against adverse moves
- Scalping: Exploit small price movements with high leverage
- Arbitrage: Capitalize on price differences across markets
- Spread Trading: Simultaneously buy and sell related contracts
Remember that advanced strategies require thorough understanding and risk management. Always test new approaches with small positions first.
Final Thoughts
OKEx perpetual contracts offer sophisticated traders powerful tools for cryptocurrency markets. By understanding both the mechanics and risks, you can strategically incorporate them into your trading approach. Start with conservative positions, prioritize risk management, and gradually build experience as you become more comfortable with contract trading dynamics.