OKCoin yesterday added a new ‘margin management’ system to its recently launched Futures trading platform, allowing multiple margin balances for a trader’s different positions.
Margin management replaces a previous system which allowed only a single margin balance for all positions held. This meant that gains and losses of individual positions had the potential to impact each other by drawing on the same margin balance.
An OKCoin representative said:
“As a pioneer of crypto-futures trading, OKCoin has devoted time to refining its platform to accommodate the most sophisticated traders in the market. With that in mind, we have been working over the past month to bring to life our new margin management system.”
Isolating risk
It is common practice amongst traders to have multiple positions open simultaneously, with some advanced users preferring to manage the amount of risk that they bear for each individual position.
OKCoin said some traders find that a one-size-fits-all margin system with a single balance lacks flexibility.
The exchange’s solution was to utilize a system called ‘fixed margin’. Under this system, traders’ positions are grouped into four types according to contract lengths: weekly, biweekly, monthly, and quarterly.
Contracts of each type are designated a fixed amount of margin the trader can then add to or reduce as needed.
The advantage of the new system is that if a position or positions turn bad, the impact will be contained, effectively isolating the risk.
While the new system affords traders more control, the original single-balance option will still be available for those who prefer it.
International expansion
Like its Chinese exchange competitors, OKCoin has diversified its feature list in recent months to appeal to a more professional trading market and an international user base.
OKCoin manager of international operations Zane Tackett told CoinDesk the new features have been instrumental in the company’s expansion.
He said:
“Initially our Futures user base was mostly Chinese, coming over from the .cn site or 796, but since we’ve started promoting internationally, we’ve seen the international customer base grow much faster than our Chinese user base.”
OKCoin re-launched its margin trading system in June, shortly after a new English language version of its website went live.
The re-launch was designed to comply with People’s Bank of China (PBOC) advice to reduce the risk of speculative activity, after OKCoin had halted an earlier margin lending and trading system in May.
In August, the firm added the Futures trading platform, which it said solved some of bitcoin’s price volatility issues by ‘locking in’ the price at a set level.