Log In Sign Up
Tiếng Việt 简体中文 繁體中文

Articles in this section

See more

Margin Overview

Avatar
Hibt
  • Updated

What is Margin?

Margin refers to the collateral required in contract trading. It is the core principle of leverage in contract trading, allowing you to participate in trades without needing to pay the full 100% of the contract value. Instead, you only need to invest a smaller amount of funds as collateral based on the contract's value; this amount is called margin.

Leverage significantly increases the efficiency of capital usage, offering the potential for high returns but also accompanying high risks. The higher the leverage used by the trader, the lower the required margin.

Example:
User A currently holds a long position in EOSUSDT with a leverage of 2x, and the current margin for this position is 0.15314844 USDT. If leverage is increased, the margin will correspondingly decrease; if leverage is decreased, the margin will correspondingly increase.

Opening Margin

Opening margin is the minimum amount of margin required to establish a position, which is displayed as the "Order Cost" when placing an order.

  • Price Fluctuation Coefficient: This coefficient is set to ensure that the order quantity required by the user can be fulfilled; if the order is fully executed and there is a remaining balance after deducting the actual opening fee, it will be automatically refunded to the available balance.

Position Margin

After establishing a position, you can view the current position margin in the "Position" section of the contract trading interface.

Maintenance Margin (MM)

Maintenance margin is calculated based on the maintenance margin rate of the position's leverage. The maintenance margin rate for each position increases as the margin tier rises.

The trading fee required for closing a position (Taker) will also be included in the maintenance margin for the position. This is the minimum amount of margin required to maintain the position. If the account balance falls below the maintenance margin, the position will be forcibly liquidated.

 

Hibt Community

Telegram：https://t.me/HIBTGlobal

Twitter(X)：https://x.com/HIBTGlobal

Media：https://medium.com/@HIBTGlobal

Facebook：https://www.facebook.com/HibtExchange

Instagram：https://www.instagram.com/hibt_official/

Related articles