What is Margin in MEXC Futures

All futures in the MEXC Futures require a certain amount of margin, and more position margin also gives the futures more leverage.

Basic concepts:

Initial Margin: This minimum margin is required to open a position. Your initial margin is dependent on margin rate requirements.

Maintenance Margin: The minimum margin requirement for maintaining a position below which additional funds will have to be deposited or forced liquidation may occur.

Opening Cost: The total amount of funds required to open a position, including the initial margin for opening a position and transaction fees.

Actual leverage: The current position includes the leverage ratio of unrealized gains and losses.

Margin calculation

In futures trading, the order cost (position margin) is the margin required to open a position.

The general formula is as follows:

  • USDT-margined Futures: Position margin = Position avg. price * Position size / leverage multiplier
  • Coin-margined Futures: Position margin = Position Size / Leverage multiplier

What follows are a series of examples that will provide more clarity on margin required when opening a position in USDT/Coin-margined Futures.

USDT-Margined Futures

If a trader wants to purchase 0.1 BTC position of BTCUSDT futures at the price of $50,000 with a leverage multiplier of 25,

then the margin required = 50000×0.1/25= 200USDT

Coin-margined Futures

If a trader wants to purchase 0.1 BTC position of BTCUSD Futures at the price of $50,000 with a leverage multiplier of 25,

then the margin required = 0.1/25 = 0.004BTC;

Add-on Margin

In the isolated margin mode, you can add position margin through the position information bar, and you can also adjust the margin reduction to improve capital efficiency.

In the cross margin mode, you need to add position margin by transferring funds from your spot account to the futures account.

Risk Limit

MEXC Futures will give a risk limit on each account. In this way, the liquidation of larger positions will happen less. With the increase of position, the required initial margin and maintenance margin will be higher. The margin rate will be increased or decreased with the change of risk limit.

Here, you can check and change your risk limit.

Risk Limit

As BTC/USDT Futures an example, when holding a position less than 1 BTC, the maintenance margin is 0.40%.

Risk Adjust

Summary

In futures trading, you need to pay attention to your margin situation at any time, and better use of margin can increase profits and reduce risk.

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The content of this webpage is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

Please note that the information and data above are cited from third-party sources & whitepapers and do not represent MEXC. Please refer to direct sources for more details. This is not financial advice and does not constitute an offer or solicitation to offer or recommend any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

This disclaimer informs readers that the MEXC Creator’s content, views, thoughts, and opinions expressed in the articles belong solely to the creators and authors, and not to MEXC Global itself. MEXC Global doesn’t give any investment recommendations or advice.

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