How does leverage work in crypto derivatives?

Published on Jul 1, 2026Updated on Jul 1, 20264 min read
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Every open position shows three prices: entry, mark and estimated liquidation price. The mark price is used to calculate your unrealised profit and loss (P&L). The estimated liquidation price indicates the price at which your position may be reduced or closed automatically.

Entry price, Mark price and Liquidation price

Your margin ratio indicates how close you are to liquidation. Select the MMR text to view the definition. Lower Maintenance Margin Ratio (MMR) indicates higher liquidation risk.

Definition of MMR in pop-up window on the trading page

We use four risk tiers:

  • Above 150% is low risk.

  • Between 120% and 150% is medium risk.

  • Between 100% and 120% is high risk.

  • At or below 100%, your position may be reduced or liquidated.

In this example, the MMR is 199%, which is low risk.

Risk tiers of MMR and their definitions

If your MMR reaches 100%, your positions will be reduced or liquidated. In isolated mode, any remaining margin after losses is returned to your trading account.

At 2x leverage, the estimated liquidation price is generally closer to the entry price. At 1x leverage, it's generally further away. You can adjust leverage before opening a position to see how the estimated liquidation price changes.

Monitor your MMR after opening a position. You can set a stop-loss from the position panel. Derivatives involve significant risk of loss and may not be suitable for all investors.

Monitor your MMR after opening a position

Choosing between 1x and 2x leverage is a risk decision. At 1x leverage, the estimated liquidation price is generally further from the entry price. At 2x leverage, it's generally closer. Lower leverage will generally keep your margin ratio higher for longer, all else being equal.

Derivatives involve significant risk of loss. At 2x leverage, a significant adverse price movement may result in liquidation and loss of deposited USDT used as margin. An adverse move of about 50% may trigger liquidation, depending on fees, funding, account settings and market conditions. This information is general in nature and is not investment advice. Learn more about stop-loss and take-profit tools here.

Disclaimer: Information about: digital currency exchange services is prepared by OKX Australia Pty Ltd (ABN 22 636 269 040); derivatives and margin by OKX Australia Financial Pty Ltd (ABN 14 145 724 509, AFSL 379035); and other products and services by the relevant OKX entities which offer them (see Terms of Service). This information is general in nature and does not take into account your objectives, financial situation or needs. You should do your own research and obtain professional advice, including to ensure you understand the risks associated with these products, before you make a decision about them. Digital assets are volatile and carry a high level of risk; you may lose some or all of your investment. Crypto derivatives carry significant risk. You could lose all of the USDT deposited in your trading account. Past performance is not indicative of future performance. Read our Terms of Service and Risk Disclosure Statement for more information. For crypto derivatives for retail clients, read the Product Disclosure Statement (PDS) and Financial Services Guide (FSG), and refer to the Target Market Determination (TMD) on our website.