Introduction to Linear Contract Leverage and Margin

CoinEx adopts a maintenance margin level system for risk control. If some users have large positions and when their positions are forcedly liquidated, others may experience auto-deleverage (ADL), which will bring risks to others. In this case, the maintenance margin level system will help avoid the situation.

Simply put, the maintenance margin level system is designed for all trading accounts with different maintenance margin ratios and maximum leverage based on different positions. The larger the position, the lower the limit on the maximum leverage available, and vice versa. In this way, it helps minimize the risk of forced liquidation.

 

Linear Contract Leverage Description

CoinEx linear contract employs several adjustable leverages, ranging from 3X to 100X.

1. How to adjust the leverage

The leverage can be adjusted after the position is successfully opened and leverage can be adjusted under both Isolated and Cross margin modes. However, when there is an existing order in the current market, you can neither switch the margin mode nor adjust the leverage.

2. Impact of adjusting leverage

When adjusting the leverage, the current position will be affected, and the position margin of the current position will be recalculated after the adjustment. Therefore, it is necessary to pay attention to the possibility of the liquidation price of the position changing when adjusting.

 

Linear Contract Margin Description

On the CoinEx linear contract market, traders can participate in the purchase and sale of contracts by paying a small amount of funds according to the contract value as a financial guarantee, which is the contract margin.

1. Cross Margin

Under the Cross Margin Mode, all the available balances in the account can be used as the margin for the current position. When the position margin is less than the maintenance margin, the available balance in the account will be added to the initial margin. If the margin cannot be filled to the initial level after all balances are used, forced liquidation will be triggered.

2. Isolated Margin

Under the Isolated Margin mode, the position margin is only used for the margin of the current position. Margins will not be added automatically when needed and must be added manually and promptly to avoid forced liquidation.

 

How is Linear Contract Margin Calculated

1. Position Margin

Position Margin = Initial Margin + Increased Margin - Decreased Margin + Unrealized PNL (Calculated at the Mark Price)

2. Frozen Margin

Frozen Margin: It refers to the frozen initial margin and trading fees when the current order cannot be executed immediately.

3. Initial Margin

Initial Margin: the minimum amount of margin for position open.

Initial Margin = Open Value * Initial Margin Rate, Initial Margin Rate = 1 / Leverage * 100%

4. Maintenance Margin

Maintenance Margin: the minimum amount of margin required to keep your position open.

Maintenance Margin = Cumulative Open Value * Maintenance Margin Rate

5. Available Margin

Available Margin: available assets for new positions or margin.

Available Margin = Transfer-in Amount - Transfer-out Amount + Realized PNL + Unrealized PNL - Position Margin - Frozen Margin