All contracts in XT.COM perpetual contract require a certain margin, and margin trading also makes the contracts have greater leverage.
In the process of margin trading, the following points need to be paid special attention to:
- Initial Margin: The minimum amount of margin required to open a position, and the initial margin rate (open position value/position margin) also reflects your leverage.
- Maintenance Margin: The minimum margin requirement for maintaining a position, below this ratio will trigger liquidation or partial liquidation.
- Cost of opening a position: the total frozen assets required to open a position, including the initial margin and possible service fee for opening a position.
- Actual Leverage: The leverage of the current position including unrealized profit and loss.
Initial margin refers to the minimum collateral amount required to open a position in leveraged trading. The leverage used by traders is inversely proportional to the initial margin required to hold a position. The higher the leverage, the less initial margin is required.
Position Margin = Initial Margin + Additional/Reduced Margin
Forward contract (USDT-M contracts):
Initial margin = average opening price × opening quantity × contract face value / leverage
The trader uses 25 times leverage and submits a limit order of 10,000 BTCUSDT at a price of 7,000. The face value of the contract is 0.0001BTC each, then:
User's margin = 7000*10000*0.0001/25= 280 USDT
Margin in cross position mode includes initial position margin and available balance.
Inverse contract (Coin-M contracts):
Order cost = number of positions opened x contract face value/(leverage x average opening price)
The trader uses 25 times leverage and submits a limit order of 10,000 BTCUSD at a price of 7,000. The face value of the contract is 1USD each, then:
User's margin = 10000 x 1/(7000x25) = 0.0571 BTC