Margin is a good-faith deposit or an amount of capital one needs to post or deposit to hold the position. It is to facilitate leveraged positions.
(1) USDT based margin formula :
Initial Margin = Multiplier * Quantity * Price / Leverage
(2) Crypto based margin formula :
Initial Margin = Multiplier * Quantity / (Leverage * Price)
| 1 BTC Contract Value |
0.0001BTC |
| Price | 10,000USDT |
| Quantity | 2,000 Contracts |
| Leverage | 10 : 1 |
| Contract Value |
Multiplier x Quantity = 0.0001 BTC * 2,000
2,000 Contracts translate to 0.2 BTC in Contract Value |
| Contract Value = 0.2 BTC | |
| Initial Margin |
multiplier * quantity * price / leverage |
| 0.0001 * 2000 * 10,000 / 10 = 200USDT
When BTC trades for 10,000USDT you need 200USDT for initial margin at 10:1 leverage. "multiplier * quantity * price / leverage" |
| 1 BTC Contract Value | 1USDT |
| Price | 10,000USDT |
| Quantity | 2,000 Contracts |
| Leverage | 10 : 1 |
| Contract Value |
Multiplier x Quantity = 1 USDT * 2,000
2,000 Contracts translate to 2,000 USDT in Contract Value |
| Contract Value = 2,000 USDT | |
| Initial Margin | multiplier * quantity / (leverage * price) |
| 1 * 2000 / (10 * 10,000) = 0.02BTC
When BTC trades for 10,000 USDT you need 0.02 BTC for initial margin at 10:1 leverage. "multiplier * quantity / （leverage * price)" |
You can use the below table to calculate initial margin requirement based on the real time prices of the quote currencies.
Maintenance Margin Rate (MMR): Minimum margin rate used to maintain the current position.
Different maintenance margin rate may result in different liquidation price.
If the underlying index price reaches the liquidation price, the deleverage/liquidation procedure will be triggered.
(1) USDT Based Contracts
Maintenance Margin = Position Margin + Unrealized P&L
(2) Coin Based Contracts
Maintenance Margin = Position Margin + Unrealized P&L
| 1 Contract Value | 0.0001BTC |
| Price | 10,000USDT |
| Quantity | 1,000 Contracts |
| Leverage | 10 : 1 |
| Margin Rate | 0.5% |
| Maintenance Margin |
Position Margin + Unrealized P&L
Position margin rate falling below the maintenance margin requirement may result in margin call where the positions can be liquidated. |
| 100-86.4= 13.6USDT |
|
P&L Calculation for open positions: Example> Long Position loses value to 9,136USDT from 10,000USDT purchase price. |
|
| Position Margin | Price * Multiplier * Quantity / Leverage |
| 10,000 * 0.0001 * 1000 /10 = 100USDT | |
| Unrealized P&L | (Price * Multiplier * Quantity) – (Average Price * Multiplier * Quantity)
Position Margin Rate (0.015%) is lower than 0.5% (Maintenance margin requirement): may result in triggering margin call. |
| (9,136 * 0.0001 * 1,000) – (10,000 * 0.0001 * 1,000) = -86.4USDT | |
| Margin Rate |
(Position Margin + Unrealized P&L) / Value of Position
|
| (100- 86.4) / (9,136 * 0.0001 * 1,000) =13.6/913.6 =0.015% | |
| 1 Contract Value | 1USDT |
| Price | 10,000USDT |
| Quantity | 1,000 Contracts |
| Leverage | 10 : 1 |
| Margin Rate |
0.5%
Position margin rate falling below the maintenance margin requirement may result in margin call where the positions can be liquidated. |
| Maintenance Margin |
Position Margin + Unrealized P&L |
| 0.01 - 0.00946 = 0.00054BTC |
|
P&L Calculation for open positions: Example> Long Position loses value to 9,136USDT from 10,000USDT purchase price. |
|
| Position Margin | Price * Multiplier * Quantity / Leverage |
| 1 * 1,000 / 10,000 * 10 = 0.01BTC | |
| Unrealized P&L | (Multiplier * Quantity / Average Price) – (Multiplier * Quantity / Current Price) |
| (1 * 1,000 / 10,000) – (1 * 1,000 / 9,136) = -0.00946 BTC | |
| Margin Rate | (Position Margin + Unrealized P&L) / Value of Position |
| (0.01 - 0.00946) / (1 * 1,000 / 9,136 * 10) = 0.049%
Position Margin Rate (0.049%) is lower than 0.5% (Maintenance margin requirement): may result in triggering margin call. |
|
| Underlying | Risk Limits | Maintenance Margin |
Minimum Margin |
Max Leverage |
|---|---|---|---|---|
| BTC | 1,000,000 | 0.5% | 1.0% | 100:1 |
| 2,000,000 | 1.0% | 2.0% | 50:1 | |
| 3,000,000 | 1.5% | 3.0% | 30:1 | |
| 4,000,000 | 2.0% | 4.0% | 25:1 | |
| ETH | 100,000 | 1.0% | 2.0% | 50:1 |
| 300,000 | 1.5% | 2.5% | 40:1 | |
| 500,000 | 2.0% | 3.0% | 33:1 | |
| 700,000 | 2.5% | 4.0% | 25:1 | |
| EOS | 100,000 | 1.0% | 2.0% | 50:1 |
| 300,000 | 1.5% | 2.5% | 40:1 | |
| 500,000 | 2.0% | 3.0% | 33:1 | |
| 700,000 | 2.5% | 4.0% | 25:1 | |
| LTC | 100,000 | 1.0% | 2.0% | 50:1 |
| 300,000 | 1.5% | 2.5% | 40:1 | |
| 500,000 | 2.0% | 3.0% | 33:1 | |
| 700,000 | 2.5% | 4.0% | 25:1 | |
| XRP | 100,000 | 1.0% | 2.0% | 50:1 |
| 300,000 | 1.5% | 2.5% | 40:1 | |
| 500,000 | 2.0% | 3.0% | 33:1 | |
| 700,000 | 2.5% | 4.0% | 25:1 | |
| BCH | 100,000 | 1.0% | 2.0% | 50:1 |
| 300,000 | 1.5% | 2.5% | 40:1 | |
| 500,000 | 2.0% | 3.0% | 33:1 | |
| 700,000 | 2.5% | 4.0% | 25:1 |
Position margin rate falling below the maintenance margin requirement may result in margin call where the positions can be liquidated.