OKEX or OKX, as they have recently rebranded to (more on that later), is a large cryptocurrency exchange and one of the OG’s in the crypto space established all the way back in 2016.
Using its expertise in the spot market, OKX offers its users the opportunity to trade Futures, perpetual swaps and options markets. In addition, while OKX was, and remains, a paradise for active crypto traders, the platform has added an earn section, access to an NFT marketplace, crypto loans area, Jumpstart launchpad, and even a way for customers to get involved in DOT slot auctions which will be covered below. Each gives traders a unique way to trade, hedge, earn, and explore the crypto markets.
So, is it worth considering?
In this OKX review, we will attempt to answer that. I will also give you some top tips that you need to know when using the platform.
In 2022, the exchange went through a facelift and overhaul, rebranding from OKEX to simply OKX. Dropping the “E” that stood for “exchange” was their way of saying that they are so much more than just a crypto exchange.
The company has decided to venture into the new crypto frontier and explore DeFi products, NFTs, games and metaverses, becoming so much more than just a crypto derivatives trading platform indeed! It looks like OKX is keen to explore all the avenues that crypto has to offer and are looking to become a one-stop-shop for crypto fans of every kind.
OKX was originally founded in Hong Kong in 2016, but in 2018 they moved to Valletta in Malta. This was no doubt in response to the favourable crypto regulations in that country.
The original exchange was a spot crypto trading exchange that has expanded rapidly since its launch. It is available in over 100 countries. The BTC futures trading on OKX surpasses $1.5bn per day in daily trading volume as the exchange caters to institutional and retail traders.
Although OKX derivatives are available in over 100 countries, some regions do not offer their services. These include the likes of the United States, Hong Kong and a list of other regions. You can see the complete list in their Terms of Service.
For our American readers, I would highly recommend checking out our FTX.US Exchange review here.
We will review the derivative instruments on OKX, including their plain vanilla futures, their perpetual swaps and their options, along with the other platform features. As many exchanges such as Binance and FTX aim to become an all-in-one platform to cater to crypto enthusiasts of all backgrounds, OKX is not sitting on the sidelines and have ensured that they are well-positioned to compete with a number of global exchanges.
To cater to their large community of traders around the world, they have translated their site into 11 different languages, including English, Russian, Chinese etc.
Is OKX Safe?
For any crypto trader, this is one of the most important considerations. Unfortunately, we know all too well the risks that could come from centralised exchanges.
When we look at exchanges, there are several factors that we take into account to determine how safe they are for their traders.
Let’s take a look at these, shall we?
OKX operates a secure hot and cold wallet security procedure. This means that the bulk of their funds are stored offline in a cold environment, meaning the funds are protected from hackers. OKX holds 95% of their funds in offline storage, utilizing a state of the art cold wallet storage system that requires confirmation from at least 2 authorized personnel. OKX has some of the most robust offline storage protocols I’ve seen; take a look below:
The other 5% of funds are kept with their servers in a “hot” environment to meet the demand for withdrawals/deposits.
When it comes to exchange infrastructure, they operate GSLB (Global Server Load Balancing). This means that they have many servers worldwide to ensure server uptime and manage trading demand.
It is also worth noting that, unlike many exchanges, OKX has suffered no known hacks to date. Looks like their security protocols are certainly up to the challenges of blocking hackers.
Given that OKX derivatives operate a leveraged trading platform, they have to have measures in place to reduce the risk posed by market movements to the trading pool.
Balances at OKX Insurance Fund
The OKX insurance fund is run to be a backstop for all those trades that cannot be liquidated above the bankruptcy price. The fund is replenished with the initial margin that liquidated traders have at the outset of their trade.
OKX has fully encrypted communications, which means that when you send them information, it is sent securely. This includes all personal documentation and passwords.
This is also helpful as it will help you identify whether you are on a phishing site. If you cannot see the padlock in the browser or the SSL certificate, then that will mean that you are not on the correct site, and you should leave immediately.
In general, the best security starts with the trader. That is why OKX has provided several tools to help users secure their accounts.
Perhaps one of the most important of these is two-factor authentication via a phone. There are two options to do this. The first is to use an SMS authentication, and the other is to use the Google authenticator.
Activating the 2FA Authentication on OKX
I would advise against the SMS authentication as this opens you up to sim swapping attacks. Hence, you can set up the Google authenticator by downloading it from the app store and binding it to the OKX server.
Another pretty neat tool that they have at OKX is their anti-phishing tool. This is basically a code sent in every single email they send you. So if you do not recognize the code, you know that the email came from an illegitimate sender. Here is a complete look at the security features that OKX users can deploy to help keep their accounts as safe as possible:
- Login password
- Email verification
- Funds password
- Mobile verification
- Authenticator app
- 2-factor authentication
- Anti-phishing code
Derivative Instruments & Leverage
So, what are derivative instruments? Well, they are an instrument that you can trade that “derive” their value from the price of some underlying instrument. In this case, they are cryptocurrencies.
Derivative instruments are leveraged, which means you can magnify your gains/losses many times over. At OKX, this can be up to 100x, depending on the instrument that you are trading.
So, for example, if you have a trade that has a leverage of 50X, it means that for a $1 move in the price of the underlying asset, your position will move by $50.
Now, let’s take a closer look at the derivative instruments they offer at OKX.
Futures are instruments whereby you agree to buy or sell some asset in the future at some predetermined time. These futures contracts are an obligation to buy/sell, which differs from options.
Payoff Diagram of a Long and Short Future Instrument
On OKX derivatives, they have futures instruments on 12 assets. These are the following: Bitcoin, Litecoin, Cardano, Polkadot, Ethereum, Ethereum Classic, Ripple, EOS, Bitcoin Cash, BSV, Filecoin and TRX. So, a pretty reasonable list.
These futures instruments have leverage of up to 100x. They have expiries that are weekly, bi-weekly, Quarterly, and Bi-quarterly. These contracts are settled every day at 8am UTC.
You can also elect to get your positions margined with either coins (crypto) or Tether (USDT). This will determine where the margin will come from.
Finally, you can elect to cross margin your futures account when it comes to futures. This means that margin can come from any one of your accounts at OKX.
OKX terms these instruments at Perpetual Swaps, but they are sometimes called perpetual futures on other exchanges. So you can basically think about them as a traditional future except there is no expiry time.
You can hold a position without any time limit and withdraw your realized profits anytime with a perpetual future. For those of you who trade CFDs or spread betting instruments, a perpetual swap has the same payout profile.
It is called a “Swap” because you are swapping the returns for one asset for another. In this case, it is a cryptocurrency vs. the US dollar. Given that you are doing this, you will have to pay a funding rate.
What is a funding rate?
It is used to ensure that the perpetual swap price is anchored to the spot market. When the funding rate is positive, longs pay shorts; when it’s negative, shorts pay longs. The exchange is not charged, but the fee between longs and shorts.
How The Funding Rate is Calculated
As is the case with the futures instruments, you have 100x max leverage, and you can choose to margin your position either with coins or with Tether. Also, the settlement on the perpetual swap occurs every 24 hours.
When it comes to asset coverage, you can trade up to 12 different assets. These include all of those that you can trade with the futures above and the addition of NEO, LINK, and DASH.
Options are derivative instruments that give the holder the right but not the obligation to buy or sell some asset in the future at some predetermined time. They are asymmetric payoff instruments.
We have an extensive guide on cryptocurrency options which you can read if you want more information. But the key thing to note is that you have a limited downside risk and an unlimited upside potential when you buy an option. This can be the opposite if you sell an option.
Payoff of a CALL option and a PUT option
There are CALL options that give you the right to buy, and then there are PUT options that give you the right to sell some asset. When buying an option, you are paying a premium to the counterparty and some trading fees to OKX derivatives. There is no margin required.
However, if you wanted to sell an option, this could be done, but you would have to request it. In addition, they will require a minimum balance in your account to cover for the event the position moves significantly away from you.
On OKX, there is currently only one asset that you can trade Options on: Bitcoin. When we checked into the platform, there were four option expiry times.
OKX Derivative Fees
When it comes to your trading profitability, one of the most important considerations is the trading fees at the exchange.
So, how does OKX stand here?
Well, they appear to be quite reasonable across the board. Of course, trading fees will differ according to your trading tier, what the instrument is, and how many OKB tokens you hold in your account.
OKX derivatives also operates with a Maker/Taker Fee model. For those new to the term, you have different trading fees depending on whether you are making or taking liquidity off the books.
Let’s take a look at the fees per instrument.
There are two types of users that have different fee schedules. These are your normal user and your VIP user. Normal users are those that have a 30-day trading volume that is below 10,000 BTC.
Within the normal user tiers, you have 5 different levels. These are determined according to the number of OKB tokens that you hold. Then, within the VIP tier, you have different levels determined according to 30-day trading volume.
Image via OKX Futures Fee Page
So, from the above, you can see that those market makers will get a rebate if they can generate over 100k in BTC trading volume on a 30-day rolling basis. These fees are in line with those of other leveraged trading platforms like ByBit etc.
Perpetual swaps have about the same fees as normal Futures. However, to reach the VIP level, you have to be trading only a minimum of 5,000 BTC.
The only difference in trading fees for the perpetual swaps comes in when you are a VIP. You have slightly higher taker fees and slightly higher rebates for the makers. I encourage you to check out the levels over here.
Something else that you will have to consider when you are trading a perpetual swap is that you will have a funding rate. This is not a fee but instead reflects the differential between the funding rate on the cryptocurrency and USD.
The funding rate can be positive or negative, and it is arranged every 8 hours. If you close your position before the funding exchange, you will not pay or receive funding. The funding rate is a dynamic number that will change to reflect market conditions.
Like with perpetual swaps, the normal users will have similar fees when trading options. However, reaching the VIP tier is much lower at only 1,000 BTC.
However, when it comes to these VIP users, you will have exactly the same trading fees for the different levels. You can see more about the option fees over here.
Ok, so you are ready to try out OKX? Then you will need to create an account. You can hit “Sign Up” and sign up using an email address, phone number, or link to a Google or Telegram account when you are on the website.
OKX Registration Process
Once you have signed up, they will send you a code that you will need to use to confirm your registration. After you hand this over, you can begin. First, they will ask you whether you would like to buy crypto or whether you will be sending in.
Warning ⚠️: Once you have finally set up your account I would suggest that the first thing that you do is confirm your 2FA.
Verification & KYC
OKX is one of the few remaining platforms that allows you to keep your account unverified without KYC. Though users who remain unverified will be limited to:
- Withdrawal (24h limit 10 BTC)
- Spot trading
- Futures trading
You can find more information about KYC levels and limits from their support site here.
To complete the first level of verification, all you need is an ID number, name, surname and place of residence. Once you have given this information, you will be verified almost instantaneously.
If you would like to move onto level 2 verification to increase your trading and withdrawal limits, you will need to upload copies of your ID document. You will also need to take some selfies of yourself to confirm.
This is all done through the use of Net Verify, which is a third party KYC service.
Once your account is set up, you will need to fund your account. There are several ways to do this. These include fiat currency as well as crypto.
If you are buying with fiat, OKX uses several third party services. These include the likes of Koinal, Simplex & Others. If you are using a bank wire, you can use Banxa, which offers SEPA and SWIFT banking services.
Some Payment Methods at OKX
The quickest and most convenient method to purchase crypto with fiat is by using a debit or credit card. OKX also supports bank transfers, iDEAL, Advcash, ApplePay, SEPA, Sofort and Google Pay, depending on your location.
If you already have crypto and want to deposit, you will have to generate an address. This can be done in your “Assets” section of your account admin. Then, you will select the applicable token, which will generate a deposit address.
Once you have sent your funds over, you will have to wait for one confirmation before it is credited. If you would like to track your deposit, you can use a blockchain explorer.
Note 📝: When you have funded your account then you will need to move that over to your futures account
Withdrawals are made in the same panel as your deposits. Before you withdraw, you will have to set up a funds transfer. This is basically a password that will allow you to confirm any withdrawals out of your account. Also, remember to be mindful of your withdrawal limits which are dependent on your tier and KYC verification level.
Warning ⚠️: When setting up your withdrawal password, be sure to use a different one from your login
Once you have set up your withdrawal password, you can go ahead and place your withdrawal amount and your offline address. Once you have made the request, they will process it, and you can monitor it on the blockchain.
Note that Fiat withdraws are not available in most countries, so you will likely need to find an alternative fiat offramp.
OKX Futures Platform
It’s time to move onto the belly of the beast and examine their trading technology and platforms. While they all use the same user interface, they differ in terms of the functionality on the platform.
If you want to trade futures, you will first have to activate your futures account. To do this, you need to complete a few questions to make sure you are familiar with futures trading.
This is actually the first time we have seen this being included on a Futures trading platform, and it is undoubtedly a wise decision by OKX. The questions are not that complex and can easily be answered if you have a basic understanding of futures trading.
Once you are done setting up your futures trading account, you can begin trading. This is, of course, assuming that you have already moved funds over, as mentioned above.
The UI of the trading platform is relatively intuitive. You have all of the markets that you can trade on the left. At the top, you can select the time to expiry and what currency you would like the funds to be margined in.
OKX Futures User Interface
Just below that, you have your options in terms of leverage and how you would like your account to be margined. Just below that, you have your order forms, charts and historical order book.
Pro Tip 💯: You can expand the chart out to full screen and use it to conduct all of your technical analysis.
If you expand the chart, you will notice that you have two options to trade with. One is the default chart offered by OKX, and the other is the Tradingview chart. For those who know trading view, it is one of the most well known third party charting packages on the market, well-liked by technical analysts.
Then, just below the charts, you have the historical & live order section. This will list all of the orders you have running at OKX and your Unrealized PnL.
Then, you have some additional beneficial info to the left of this. For example, you can check out the index prices and mark prices. Remember that the mark price is the one that is used to settle the derivative instruments, whereas the index price is the one that is referenced to formulate the mark price.
For the Night Owls 🦉: You can switch the trading interface and make it a dark theme
Something that I really found quite helpful was their Trading Data tab. This gives you everything you need to know about what is going on in the OKX futures market. This includes:
- Long Short Ratio: The ratio of longs and shorts in the market
- BTC Basis: The difference between the future or swap price and the spot price.
- Swap Funding Rate: Estimated fee rate on the perpetual swap.
- Top Trader Sentiment Index: Percentage of Longs / Shorts held by the top 100 traders
The first thing you should note is that the max-margin of 100x will depend mainly on the size of the position you currently hold.
If you pop on over to the position tiers guide, you will see that the 100x leverage (or 1% margin) only applies to those positions that are less than 3,000 contracts. As you take on more contracts, your leverage factor will decrease. This is because of an increase in the initial margin and the maintenance margin.
Position Tier Guidance at OKX
Then, when it comes to how this is margined from your account, you can either elect to have it margined in crypto (Coin margin) or margined in Tether.
Finally, you have the option to cross margin. This basically means that margin will be drawn from not only your futures account where the funds are but also from the other accounts where you have funds. We would advise against this, though.
If you want to trade perpetual swaps, it has much of the same UI as the Futures instruments. The only difference is that you can’t change the expiry time.
Another thing that you should observe is the funding rate. This is dynamic and constantly changing, so be sure to monitor it before you place your trades.
You will also want to take a closer look at the position tier guides and how that will impact the margin requirement. They are slightly different for the higher tier limits than with Futures.
When it comes to the options platform, the layout is similar, although the functionality is quite different.
There are several ways in which you can buy an option. Perhaps the most user-friendly manner is to use the options Discovery tool. This allows you to hone in on the ideal option for your trading conditions.
Using the Options Discovery tool will also draw you out a neat payoff diagram where you can see the profit/loss that will incur for said option. Once you are OK with the set parameters, it will take you to the market for the said option.
Options Trading Functionality at OKX
However, if you want to look at the broader market, you can go to “All Options”. This UI is similar to that of the likes of Deribit for those of you who have used that exchange. You will see an overview of all of the PUTs and CALLs and the different expiries.
Note 📝: Those options that are out-of-the-money are much less liquid than those closer to the money.
Once you have selected the option you want to trade, either through option discovery or All Options, you will have a similar trading interface to the Futures and Swaps.
Something that you should note, however, is that you only have one order type that you can take out on the option. This is a Limit order. So you don’t need to place any stops; however, as you know, your downside is limited.
Finally, there is a dropdown at the top of the charts where you can observe the “Greeks” of the options. These are basically the factors that determine the option price sensitivity. We won’t go into the specifics of the Greeks here, but Guy did a complete video on that.