Investment Portfolio Margin Account: Full-Coverage Trading Rules

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In the fast-evolving world of digital asset trading, maximizing capital efficiency while maintaining strong risk control is essential. The Investment Portfolio Margin (PM) model offers a sophisticated solution by allowing traders to manage multiple product types—spot, margin, perpetual, futures, and options—within a single unified account. This advanced system leverages a comprehensive risk model to calculate margin requirements based on the entire portfolio’s exposure, significantly reducing capital needs compared to isolated margining.

Note: This version of the Portfolio Margin model will be discontinued on January 21, 2025.

What Is Portfolio Margin?

The Portfolio Margin framework evaluates your combined positions across spot, leveraged trading, perpetual swaps, futures, and options using a holistic risk-based approach. Instead of treating each position independently, it identifies natural hedges within your portfolio—such as long spot and short derivatives on the same asset—and reduces required margin accordingly.

All assets are converted into USD equivalents for standardized measurement of both Initial Margin Requirement (IMR) and Maintenance Margin Requirement (MMR). This unified valuation ensures consistency and transparency in assessing account health.

This model enhances capital utilization without compromising safety, making it ideal for experienced traders managing complex, multi-layered strategies.

👉 Discover how Portfolio Margin can optimize your trading efficiency

How to Enable a Portfolio Margin Account?

To qualify for a Portfolio Margin account, users must meet two primary criteria:

Once enabled, users gain access to powerful tools that dynamically assess cross-product risk and optimize margin allocation.

Risk Offset Mechanisms in Portfolio Margin

OKX supports two distinct modes under the Portfolio Margin system, designed to reflect different hedging behaviors and risk profiles.

1. Derivatives-Only Mode

In this mode, all derivative positions—perpetuals, futures, and options—are grouped into risk units based on their underlying asset and settlement currency. For example:

Each risk unit is stress-tested independently to determine its potential loss under extreme market conditions. This granular approach enables precise risk modeling and efficient margin offsetting within related instruments.

⚠️ Important: Even if two contracts track the same asset (e.g., BTC), differences in settlement currency (USD vs. USDT) place them in separate risk units.

2. Spot Hedging Mode

This advanced mode allows spot holdings to be included in margin calculations when they act as a hedge against derivative exposure. By integrating spot into the risk model, users can significantly reduce required margin when holding offsetting positions.

Users can choose from three sub-modes:

Upon first activation, the default setting is Spot Hedging - USDT Mode. Users can adjust preferences via the settings panel.

You can monitor your "Spot in Use" values under the [Positions] and [Assets] sections on the trading interface.

How Is Portfolio Margin Calculated?

The core of the Portfolio Margin system lies in its multi-dimensional risk assessment. The Maintenance Margin Requirement (MMR) aggregates worst-case losses across all risk units under various stress scenarios.

Key Components of MMR:

Initial Margin (IMR) is derived as:

IMR = 1.3 × Derivatives MMR + Borrowing IMR

This multiplier ensures a buffer above maintenance levels, enhancing system stability.

Spot Hedging Usage Rules

When spot is included in hedging, the amount counted toward margin reduction depends on the delta exposure of corresponding derivatives:

  1. If spot > 0 and derivative delta < 0,
    → Spot in use = min(|spot|, |combined delta|, user-defined limit)
  2. If spot < 0 (borrowed) and derivative delta > 0,
    → Borrowed spot in use = -min(|spot|, |combined delta|, user-defined limit)
  3. Otherwise, no spot is considered in use.

This logic ensures only effective hedges reduce margin requirements.

Core Risk Metrics Behind Margin Calculation

The system evaluates seven key risk factors (MR1–MR7) across each risk unit:

MR1: Spot & Volatility Risk

Stress tests price moves (±4% to ±25%, depending on asset) and implied volatility shifts across 21 scenarios. Highest loss determines MR1.

MR2: Time Decay Risk (Options Only)

Estimates value erosion over 24 hours with constant price and volatility.

MR3: Volatility Term Structure Risk

Assesses risks from non-parallel shifts in volatility curves across expiration dates.

MR4: Basis Risk

Evaluates divergence between futures prices of different maturities. Stress tests basis changes up to ±40%.

MR5: Interest Rate Risk (Options Only)

Uses principal component analysis (PC1/PC2) to simulate yield curve shifts affecting option pricing.

MR6: Extreme Market Volatility Risk

Applies double the standard price shock (e.g., ±24% for BTC), focusing on tail-event resilience.

MR7: Liquidation Cost

Includes taker fees and slippage, scaled by position size via tiered multipliers (up to 13× for large positions).

Final Derivatives MMR = max( [MR1–MR6 composite], MR7 )

👉 See how advanced risk modeling protects your portfolio

Simulate Your Portfolio Before Committing

OKX provides a Portfolio Creator tool that lets users:

This simulation capability empowers informed decision-making and helps avoid unexpected margin calls.

What Happens During Forced Liquidation?

Liquidation triggers when the margin ratio falls below 100%. A warning is issued at lower thresholds (e.g., 300%).

The process follows a strict sequence—once a stage completes, it does not revert:

Step 1: Dynamic Delta Hedging (DDH)

Activates when MR1 or MR6 dominates risk. Uses perpetual or futures trades to neutralize large delta exposures (e.g., after a sharp BTC drop).

Step 2: Basis Risk Hedging

Targets the most exposed risk unit by closing offsetting spot/derivatives pairs to reduce basis divergence.

Step 3: General Position Reduction

Gradually closes positions with the highest margin impact until the account reaches safety (>110% margin ratio) or all positions are liquidated.

Due to low liquidity in some options markets, forced unwinding may result in new futures positions to manage residual risk.

Frequently Asked Questions (FAQ)

Q: Can I switch between Spot Hedging modes anytime?
A: Yes. You can change your hedging preference in the account settings at any time. Changes take effect immediately.

Q: Does Portfolio Margin support cross-currency hedging?
A: No. Hedging only applies within the same risk unit (same underlying and settlement currency).

Q: How are borrowing costs calculated under auto-borrow?
A: Interest accrues only on actual liabilities exceeding免息 limits. Virtual borrows (from order placement) do not incur interest.

Q: Are there fees for using Portfolio Margin?
A: No additional fees apply. You pay standard trading fees; margin optimization is free.

Q: Can I use this mode with small accounts?
A: Minimum requirement is $10,000 net assets. Smaller accounts can use isolated or cross-margin modes instead.

Q: How often are risk parameters updated?
A: Market data and stress test parameters are refreshed regularly based on volatility trends and liquidity conditions.

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