Cross & Isolated Margin Mode

Overview

Margin is the amount required to buy or sell leverage positions in derivatives.

Initial Margin:The minimum margin amount to open a position, at the same time the initial margin fee rate （Open position value/position margin）is also embody your leverage ratio.

Maintenance Margin: The minimum margin requirement to maintain positions,ratios lower than this level will trigger forced liquidation or partial liquidation.

Opening Cost: The frozen assets required for opening position,which is including the initial margin and handling fees necessary.

Actual Leverage Ratio: The current position includes the leverage ratio of unrealized P/L.

As different users have different trading strategies, our perpetual swap adopts two different methods of margin mechanisms:

Cross Margin : Margin is shared between positions. A position of contract will withdraw more margins from the account balance to avoid the liquidation.

Isolated Margin: The margin allocated to a position is limited to a certain amount. If the position margin falls below the maintenance margin level, the position will be forced to liquidation situation. However, you can still increase or decrease the margin of this position before the forced liquidation.

Cross Margin

Cross margin refers to make use of all available balances to avoid the forced liquidation situation occurred. Realized profits in the same account can help to increase margins in loss positions.

This approach is useful for investors with existing positions to make the profits, and is also an effective method for arbitragers who doesn’t want to expose one side of the position to risk due to the liquidation.

Please note that there will not be automargin call function under the cross margin mode.For all of your balances can be deposit as margin under cross mode.

Isolated Margin

In isolated margin mode, the maximum loss of your position is limited to the margin used. When a position is forced to close, any available balance in your account will not be used to increase the margin of this position.

Isolated margin is useful for position speculation. By isolating the margin used in a certain position, you can limit the loss of that position to the initial margin amount ,so that it could be helpful when your short-term speculative trading strategy fails.In a choppy market, a position of highly leveraged ratio could soon lose its margins. However, please note that while the target of a perpetual swap is to minimize the occurrence of forced liquidation events, high leverage ratio situation is more likely forced to liquidation in choppy markets. For example, a 50 times leveraged position would be forced to liquidation when market prices moving 2% in the opposite side.

When a certain position uses isolated margin, the margin of the position is adjustable.You can ensure security of your position by increasing the margin to reduce the actual leverage ratio,otherwise you can also open the automargin call function manually.

Switch between Cross & Isolated Margin

Cross mode or isolated mode is for each futures, they can be setted separately from contract to contract.When you switch margins betweeen cross and isolated mode for a certain futures,current position cannot be held.If you’re already holding positions,liquidation is required before starting the operation.