What are the position tier rules for on-chain perpetual futures?
What are the position tier rules for on-chain perpetual futures?
Position tier rules for on-chain perpetual futures on OKX exchangeOS link your position value to margin requirements and the leverage you can select. This article explains how the rules affect your position limit, liquidation, and changes to existing positions.
How do position tiers work for on-chain perpetual futures?
On-chain perpetual futures use linear formulas to calculate margin ratios. Up to the base tier limit, the ratios stay at their base levels. Above that limit, they increase continuously as your position value grows.The increase is proportional: you don't need to add a full 100,000 USD of position value before the ratio changes. For example, if a ratio increases by 0.1 percentage points per 100,000 USD, a position 50,000 USD above the base tier limit adds 0.05 percentage points.
What do IMR and MMR mean for on-chain perpetual futures?
Term | Meaning | Purpose |
|---|---|---|
Initial margin ratio (IMR) | The ratio calculated from the position tier formula | Determines the relationship between position value and permitted leverage |
Maintenance margin ratio (MMR) | The ratio used to calculate maintenance margin | Determines the margin required to maintain your position |
Maintenance margin | Position value × MMR | Forms part of the requirement used to assess liquidation risk |
The IMR formula sets leverage and position size limits. Your position's actual initial margin is calculated as Position value ÷ Selected leverage.
For example, a position worth 100,000 USD at 20x leverage requires 5,000 USD in position initial margin. Fees, existing positions, and open orders also affect the funds you need to place an order.
How are IMR and MMR calculated for on-chain perpetual futures?
IMR = Base IMR + max(0, (Position value − Base tier limit) ÷ 100,000 USD) × IMR change rate
MMR = Base MMR+ max(0, (Position value − Base tier limit) ÷ 100,000 USD) × MMR change rate
The max(0, …) term means that position values below the base tier limit don't reduce the ratio below its base level.
Input | Meaning |
|---|---|
Position value | Absolute position quantity × Mark price |
Base tier limit | Position value up to which the base ratios apply |
Base IMR / MMR | The starting margin ratios |
IMR / MMR change rate | The increase in the corresponding ratio per additional 100,000 USD above the base tier limit |
Suppose a contract has a base tier limit of 100,000 USD, a base IMR of 2%, a base MMR of 1%, an IMR change rate of 0.2%, and an MMR change rate of 0.1%:
Position value (USD) | IMR | MMR | Maintenance margin (USD) |
|---|---|---|---|
50,000 | 2% | 1% | 500 |
100,000 | 2% | 1% | 1,000 |
150,000 | 2.1% | 1.05% | 1,575 |
300,000 | 2.4% | 1.2% | 3,600 |
The current MMR applies to the entire position value. For the 300,000 USD position, maintenance margin is 300,000 × 1.2% = 3,600 USD.
Note: all parameters and amounts in this article are examples, not the current settings of any contract. Changes in the mark price can change your position value and margin requirements even if your position quantity stays the same.
How does leverage affect my maximum position value in on-chain perpetual futures?
Maximum position value and leverage are inversely related: the higher the leverage you select, the lower the maximum position value permitted, and vice versa, subject to the contract's overall position limit.When the IMR change rate is greater than zero:
Theoretical maximum position value = Base tier limit + (1 ÷ Leverage − Base IMR) × 100,000 USD ÷ IMR change rate
Use percentages as decimals in this formula—for example, 2% = 0.02. The actual limit is capped at the contract's overall maximum position value and rounded down to the applicable value increment. Refer to the limit displayed for your selected leverage.
Using the example parameters above, and assuming the overall cap and rounding don't change these results:
Selected leverage | Maximum position value (USD) |
|---|---|
50x | 100,000 |
40x | 350,000 |
25x | 1,100,000 |
You can select only whole-number leverage, such as 10x or 11x, not 10.5x. Lowering leverage can increase your position limit, but it also increases the initial margin required for the same position.
Open orders that could increase your position are included in the relevant limit checks. Your maximum position value therefore isn't the same as the additional position value you can open.
Note: if the IMR change rate is zero, the inverse formula above doesn't apply. The contract's configured leverage and position limits still apply.
When does liquidation occur for on-chain perpetual futures?
Liquidation is triggered when your applicable margin equity is no longer sufficient to cover maintenance margin and estimated position reduction trading fees. This article uses the term “risk ratio” for the following calculation:
Risk ratio = (Maintenance margin + Estimated reduction trading fees) ÷ Margin equity
With positive margin equity, a risk ratio of 100% or more meets the liquidation threshold. A position requiring maintenance margin is also at risk if its supporting equity falls to zero or below.
Margin mode | Assessment scope |
|---|---|
Cross margin | The account equity for the margin currency, including the balance and unrealized PnL, compared with the combined maintenance margin and estimated reduction trading fees of the relevant cross-margin positions |
Isolated margin | The margin balance and unrealized PnL supporting that position, compared with its maintenance margin and estimated reduction trading fees |
The risk ratio isn't the MMR. An MMR of 1.2% means maintenance margin equals 1.2% of position value. Liquidation depends on whether your equity covers that amount and the applicable fee requirement.
How is my position reduced during liquidation of on-chain perpetual futures?
The system calculates how much of your position it needs to take over to bring the risk ratio down to the configured recovery target. The part taken over is removed from your position. The calculation uses the linear MMR formula rather than a fixed reduction to the next tier boundary.
It accounts for the remaining position's value and MMR, estimated trading fees for the remaining position, and the equity left after takeover-related margin deductions and trading fees. The takeover quantity is rounded up to the contract's quantity precision.
Condition at liquidation | Outcome |
|---|---|
Position value is at or below the base tier limit | The entire position in that contract is taken over |
A partial takeover reaches the recovery target and leaves a calculated position value at or above the base tier limit | The calculated portion is taken over |
No valid partial takeover reaches the target, or the calculated remaining position value is below the base tier limit | The entire position in that contract is taken over |
Partial liquidation isn't guaranteed. In cross margin, the system calculates the required takeover contract by contract, taking the other relevant positions into account and reassessing the account as it proceeds.
What does a partial liquidation calculation look like for on-chain perpetual futures?
Assume you have one position worth 300,000 USD and margin equity of 3,446 USD. Use the earlier example's base tier limit of 100,000 USD, base MMR of 1%, and MMR change rate of 0.1%. Also assume a reduction trading fee rate of 0.05%, a recovery target of 95%, and an unchanged mark price during the calculation.The calculation gives a takeover value of 110,000 USD, leaving a position worth 190,000 USD. Assuming the corresponding quantity meets the contract's quantity precision:
Item | Before takeover | After takeover |
|---|---|---|
Position value (USD) | 300,000 | 190,000 |
MMR | 1.2% | 1.09% |
Maintenance margin (USD) | 3,600 | 2,071 |
Estimated reduction trading fees on the remaining position (USD) | 150 | 95 |
Margin equity (USD) | 3,446 | 2,280 |
Risk ratio | Approximately 108.82% | 95% |
For the portion taken over, the applicable MMR is 1.01%. The takeover deducts 110,000 × 1.01% = 1,111 USD in margin and 110,000 × 0.05% = 55 USD in trading fees. Remaining equity is therefore 3,446 − 1,111 − 55 = 2,280 USD.
The remaining position's risk ratio is (2,071 + 95) ÷ 2,280 = 95%. This meets the example recovery target, and the remaining position value is above the base tier limit, allowing a partial takeover.
Note: 95% is an assumed recovery target for this example, not a fixed setting for every contract. Actual takeover quantities depend on current prices, applicable parameters, fees, other positions, and quantity precision.
What happens to my on-chain perpetual futures position when tier parameters change?
If you take no action, your existing position continues to use its previous tier parameters for MMR calculations. A parameter update alone therefore doesn't immediately apply a new MMR to that position. Price movements, funding payments, and changes in equity can still affect liquidation risk.
Your action | How the latest rules apply |
|---|---|
Open or increase a position | The latest tier requirements are checked; new or increased exposure must meet them |
Amend an order to increase exposure | The latest tier requirements are checked |
Adjust leverage | Your position and relevant open orders are checked against the latest requirements |
Close using a reduce-only order | Moving to the latest tier isn't a prerequisite |
Cancel an order | Moving to the latest tier isn't a prerequisite |
When an action updates your position to the latest tier, the relevant position uses the new parameters. If margin or position limits don't meet the latest requirements, the action may be rejected or an order may not execute.
For an order that could reverse your position, the actual fill matters. If it only reduces your existing position, the remaining position keeps its previous tier. If it creates a new position in the opposite direction, the new position uses the latest tier.
Check the latest permitted leverage, position limit, and margin requirements before increasing exposure or changing leverage.
Crypto products involve significant risk. Prices can go up and down, and you may get back less than you put in. This article is for informational purposes only and is not financial, investment, or tax advice. Please do your own research and seek independent advice before making any investment decisions.