What is Contract Margin?

2023-12-01 10:42:24

deposit

The margin trading system has a certain degree of leverage, and investors do not need to pay the full amount of the contract value, but only need to pay a certain percentage of the margin to trade. The leverage effect of the margin system magnifies the returns and also magnifies the risks exponentially, and in the event of extreme market conditions, investors may even lose more than the principal invested. On Bigex, we provide up to 200 times leverage, and the margin is divided into cross margin and isolated margin, the cross margin guarantees that it is possible to lose all the funds in the account, and the isolated margin can lose the maximum margin of the contract position

Occupied margin, free margin and order margin

Occupied margin, also known as position margin, is the margin that has been used by the customer when trading, and the free margin is the amount left over from the margin that the customer can still use;

It is calculated as follows:

Free Margin = Equity - Occupied Margin - Entrustment Margin + Floating Profit and Loss

Occupied margin = number of open positions \ * opening price / leverage

Discretionary margin refers to the margin used in entrusted transactions

Order Margin = Order Quantity * Order Price / Leverage

Margin rate

Margin is used to measure the user’s risk factor, when the margin rate is insufficient or below a certain level, it will be forced to close the position, and in Bigex margin rate is used in cross margin mode, when the margin rate is less than or equal to 50%, the forced liquidation will be triggered

Cross margin rate = (long position income + short position income + long position margin + short position margin + account available USDT balance + account frozen USDT amount - long position handling fee - short position handling fee) / (long position margin + short position margin).

Isolated margin rate = (profit + position margin - closing fee) / position margin, when the margin rate is less than or equal to 10%, the forced liquidation will be triggered

Source: Golden Finance

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