What is the maintenance margin rate?
It is related to the user's position size and has nothing to do with the leverage level. When the user's position is larger, the maintenance margin rate will usually increase along with it. Usually, the maintenance margin rate will be set to half of the initial margin rate. When the user holds a contract and the account is lower than this maintenance margin, the user will be suspended. Liquidate the position and lose all maintenance margin.
You can go to Leverage and Margin to check the leverage and margin rate of each contract.
What is a forced liquidation?
Forced liquidation, also known as liquidation. When your margin cannot meet the maintenance margin requirement of a position, a forced liquidation will be triggered and all the margin used for the position will be lost. When the mark price reaches the liquidation price, the liquidation will be triggered.
When will the liquidation liquidation fee be incurred?
When a forced liquidation is executed, all current entrusted orders in the account will be cancelled immediately. According to the risk level of the user's position, perform forced liquidation operations of different degrees to avoid all positions being forced to liquidate. Liquidation will also charge a "liquidation liquidation fee". Therefore, we strongly recommend that users close their positions by themselves before the available assets in the account drop to the liquidation price to avoid additional fees due to forced liquidation.
Force liquidation fee
You can refer to the liquidation rate of each contract in the trading rules.
Calculate Maintenance Margin
Maintenance Margin = Initial Margin * Maintenance Margin Ratio
Maintenance margin to trigger liquidation
= (Contract Value) * (Initial Margin Ratio - Maintenance Margin Ratio)
= Initial Margin - Maintenance Margin
Take BTCUSDT perpetual contract as an example:
|
Level
|
Open price range(USDT)
|
Maximum leverage
|
Initial Margin Rate(%)
|
Maintenance Margin Rate(%)
|
|
1
|
~50000
|
125
|
0.80
|
0.40
|
|
2
|
~250000
|
100
|
1.00
|
0.50
|
|
3
|
~1000000
|
50
|
2.00
|
1.00
|
|
4
|
~5000000
|
20
|
5.00
|
2.50
|
Assume a trader buys 5 BTCUSDT long contracts at 68,000 with 10x leverage
Initial Margin Ratio = 1 / Leverage = 1 / 10x = 10%
User's contract value = 5 * 68,000 = 340,000 (position falls at level 3, corresponding maintenance margin rate = 1%)
Initial Margin = Contract Value / Leverage = 340,000 / 10x = 34,000
Maintenance Margin = Contract Value * Maintenance Margin Ratio = 340,000 * 1% = 3,400
Therefore, when the user's maintenance margin is equal to the following amount, a liquidation will be triggered
= ( 5 * 68,000 ) * ( 10% - 1% )
= 34,000 - 3,400 = 30,600
Calculate liquidation price
Liquidation Price = Buying Price - [(Initial Margin - Maintenance Margin)/Leverage Level]
Continuing the above example:
Liquidation Price = 68,000 - [(34,000-3,400)/10x] = 64,940
