Short selling, or shorting, is a trading strategy that can be used to profit from market volatility and hedge long positions. This guide will provide detailed steps on how to short on OKX, one of the premium cryptocurrency platforms in the market. Our tutorial will also walk through short selling with margin and futures on OKX.
Quick Guide: How to Short on OKX
Below is a quick step-by-step guide to the entire shorting process on OKX:
- Open an OKX account. Log in using an existing account or visit the website to create a new account.
- Deposit funds. Transfer funds to the OKX wallet using any payment method, including fiat or crypto.
- Select a crypto pair to short. Search for available crypto pairs from OKX’s margin trading home screen and select a pair to short-sell on the margin market.
- Borrow funds. Decide on the amount to borrow and deposit collateral from the margin wallet.
- Open a short position. Enter the amount of margin to use and execute a short-sell trade using a market or limit order at the desired price.
- Repay the borrowed funds. Once the trade is completed, repay the amount borrowed and accrued interest.
Can You Short Crypto on OKX?
Yes, OKX allows investors to short Bitcoin and other cryptocurrencies. There are currently four different ways to short on OKX which include direct selling, spot margin, futures, and perpetual swaps or its options platform.
- Direct Short Selling. This involves directly selling an asset on OKX's exchange at a specific market price when the asset drops in value. It’s the most common method and does not entail borrowing the underlying asset.
- Margin Trading. This is a more premium selling option than the Direct method. Using the margin trading platform on OKX, you can short an asset by leveraging on 'margins', otherwise known as borrowed funds.
- Futures/Perpetual Swaps. OKX offers short selling in the futures market by requiring them to sell an asset at a specific future date. Hence, they can short on the future price trajectory of Bitcoin, Ethereum, and other cryptocurrencies using leverage up to 125x.
- Crypto Options. The last method offered by OKX to short is opening crypto puts on the options trading platform. Just like the futures or derivatives market, it allows users to predict the future price trajectory of a cryptocurrency. The traders never lose their assets but only the options premium if the trade goes against their plan.
Can You Profit From Short Selling on OKX?
Short selling BTC and other cryptos on OKX can be highly lucrative for advanced and experienced traders. However, short selling that involves leverage can be high risk for newer traders that don't have strong technical and analytical skills. OKX does have a demo trading account that can be used to practice shorting on the futures market.
What Are The Fees To Short on OKX?
Short selling incurs trading fees on the OKX platform like any financial transaction. The cryptocurrency exchange operates on a tiered-fee maker/taker model system. This significantly reduces depending on the trading volume of the investor. The OKX shorting fees are stated below. For a full review of OKX's fees, read this article.
- Flat fee of 0.08% for makers and 0.1% for takers (non-VIP investors)
- Futures maker fee of 0.02% and 0.05% for taker
- Put options of 0.02% for makers and 0.03% for takers
- Hourly interest rate of 0.00408%
- Daily interest rate of 0.098%
How to Short on OKX with Margin
1. Login or create a new OKX account
The first step is to create a new OKX trading account. To register, tap 'Sign Up' at the top of the homepage. Enter a valid email address and a unique password. Once done, tap the relevant button to complete the process. For those that already use OKX, tap 'Login' and enter the registered mobile number, email address, or use the QR code option.
2. Deposit funds to OKX
To short crypto on OKX, new accounts must be KYC-verified. Once that is completed, tap ‘Deposit’ in the trading account to fund the trading account. Alternatively, select ‘Buy Crypto’ from the list of options at the top of the trading screen. OKX enables users to fund their accounts via bank cards, peer-to-peer (P2P) trading, and third-party payment channels as well.
3. Choose a crypto trading pair to short
To short sell using the margin trading option, hover the mouse on ‘Trade’ at the top of the page. Select ‘Margin’ from the run-down list of options. This will redirect the investor to the Margin trading platform (as shown below).
Select the underlying asset to trade. For instance, OKX offers margin trade for the BTC/USDT and the ETH/USDT pair. The trader can either directly input the asset's ticker symbol or scroll through the options to make a pick. Once the preferred trading pair is located, select it to open the trading interface.
Choose between 'Crypto-margin' or 'Stablecoin-pegged' margin trade. After that, select between 'Cross' and 'Isolated' trading modes. Cross-margin trades mean the margin balance would be shared across all open positions, while Isolated assigns a margin balance to a single position.
4. Borrow funds
The next step is to borrow funds to increase the trading capital to meet the margin requirements. To do this, scroll downwards and insert how much of the asset to borrow. The OKX platform will inform the maximum amount of margin that can be obtained. Select the time frame to repay the loan and tap the relevant button to get the funds in the account.
5. Enter a short position using margin
Once the borrowed funds are in, select between limit, market, and stop-loss order types. They must also select the leverage between 3x to 22x on their trade. The final step is to enter the entry price from where the short position will be executed. Once reviewed, tap 'Open Short' to execute the short trade.
6. Close trade and repay borrowed money
To close a trade, click on the ‘Positions’ tab and select the position to close and the set price. Alternatively, use a limit order (take profit) to automatically close the margin trade at the desired price. The trade's profit and loss (PNL) would be visible.
Once the trade is finalized, you will need to repay the loan including the interest accrued on the amount. To repay the debt, navigate to the account page and select 'Repay'. Select the borrowed asset and amount to be repaid and click 'Confirm Repayment' to complete the refund. The wallet must have sufficient funds to be able to pay the loan.
How to Short on OKX with Futures
For short-selling Bitcoin futures trading on OKX, follow these steps.
1. Create an OKX Account
Sign up or log in to a verified account. For new users, the signup process is swift. KYC is also required for new trading accounts to short futures.
2. Deposit funds
Fund an account to be eligible to short futures on OKX. The OKX platform offers various payment methods to deposit and withdraw assets. To deposit, tap 'Buy Crypto' at the top of the page and select between cards, P2P, or third-party payment gateway. Users can also transfer cryptocurrencies from third-party exchanges and crypto wallets.
3. Choose a trading pair
Once a deposit is made, hover on the 'Trade' section and select 'Futures' from the drop-down menu. Scroll through the list of assets and select a relevant one. BTC/USDT is usually the most popular choice amongst users due to high liquidity and trading volume. Next, immediately select between 'Cross' and 'Isolated' trading modes beneath the trading chart.
4. Select leverage amount and enter short position
Afterward, select one of the three order types 'Limit,' 'Market,' or 'Stop Loss.' Next, set a limit price for short selling Bitcoin. There is a side-by-side arrangement of the 'Buy/Long' and 'Sell/Short' positions. Select the 'Sell/Short' option to execute the Bitcoin shorts trade. To close a trade, tap 'Positions' and select the trading pair to close the position at the current or future price using a limit order (stop loss).