Introduction to Tiered Maintenance Margin
1. The tiered maintenance margin is a dynamic risk management mechanism where the platform adjusts the maintenance margin rate and maximum leverage based on a user's position size. The maintenance margin rate increases in proportion to the position size.
This mechanism maintains the balance between systematic risk and market liquidity.
- Small positions: Higher leverage and lower maintenance margin.
- Large position: Lower leverage and higher maintenance margin.
2. Maintenance margin calculation
- Linear contracts: Maintenance margin = Mark price × Position size × Maintenance margin rate
- Inverse contracts: Maintenance margin = (Contract face value × Contract quantity / Mark price) × Maintenance margin rate
Advantages of Tiered Maintenance Margin
1. Adapts to diverse trading strategies: Small position holders can trade with a higher leverage to magnify capital, while large position holders are subject to reasonable leverage caps to reduce risks.2. Protects retail investors: Allow higher leverage (e.g., 100X) for small positions to accommodate risk tolerance, while the margin tiers prevent over-leverage across all position sizes.3. Balances market dynamics: In extreme market conditions, limiting leverage for large positions and increasing their margin requirements reduces the impact of large liquidations on market liquidity. This mitigates price swings caused by the price volatility of oversized positions and maintains market stability.
Tiered Maintenance Margin Examples
1. BTCUSDT Linear Contract Market
| Position Size (BTC) | Maintenance Margin Rate | Min. Initial Margin Rate | Max. Leverage |
| 0 - 20 | 0.50% | 1.00% | 100X |
| 20.0001 - 50 | 1.00% | 2.00% | 50X |
| 50.0001 - 100 | 1.50% | 3.33% | 30X |
| 100.0001 - 200 | 2.00% | 5.00% | 20X |
| 200.0001 - 500 | 2.50% | 6.66% | 15X |
| 500.0001 - 1,000 | 3.00% | 10.00% | 10X |
2. BTCUSD Inverse Contract Market
| Position Size (Contracts) | Maintenance Margin Rate | Min. Initial Margin Rate | Max. Leverage |
| 0 - 500,000 | 0.50% | 1.00% | 100X |
| 500,001 - 1,000,000 | 1.00% | 2.00% | 50X |
| 1,000,001 - 2,000,000 | 1.50% | 3.33% | 30X |
| 2,000,001 - 5,000,000 | 2.00% | 5.00% | 20X |
| 5,000,001 - 10,000,000 | 2.50% | 6.66% | 15X |
| 10,000,001 - 20,000,000 | 3.00% | 10.00% | 10X |
Notes
1. Trade reasonably with leverage: High leverage amplifies risks. Align the leverage and position sizes with your risk tolerance.
2. Track positions regularly: Market fluctuations can shift your position into a higher tier, leading to stricter margin requirements and a margin call. Make sure to monitor your account and maintain sufficient margins to avoid forced liquidation.