Margins

What is a margin
In the virtual contract market, traders may participate in the contract trading by only paying a small amount of funds, in a certain proportion of the contract price, as the financial guarantee for the performance of the contract, which funds constitutes the virtual contract margin.
Position margin = Initial margin + Variation / reduced margin
Wherein, Initial margin = Contract multiplier * Quantity * Price / Leverage

Relationship between margins and leverage
Leverage is a common financial trading system, known as the margin system. "Leverage" not only magnifies the tradable amount of an investor, but also increases the earnings and risks of the investor.
For example:
Assuming that the latest trading price of BTC is $10,000, the user buys 1,000 lots of long positive perpetual contracts with a 10X leverage.
Long lots bought by the user = Number of long contracts opened = 1,000 lots.
Margin required for the user = Contract multiplier * Lots * Latest trading price / (Leverage ratio) = 0.0001 * 1,000 * 10,000 / (10) = 100 USDT.
Warning: High leverage leads to both high earnings and high risks. Please understand the risks before using it.

Relationship among the leverage, initial margin rate, maintenance margin rate and margin rate.
Leverage: The opening leverage ratio selected by the user
Initial margin rate: = 1 / Leverage ratio
Position margin: = Contract multiplier * Positions held * Average trading price / Leverage ratio
The maintenance margin rate: It refers to the minimum margin rate required by the user to maintain his or her current positions. Margin-call prices vary with maintenance margin rates. If the index price reaches the user’s margin-call price, the position-reduction or liquidation process will be triggered.
The maintenance margin rate is used to calculate the margin-call price
Margincall Price of Long Positions = (Positions * Contract Multiplier * Average Opening Price - Initial Margin + Service Charges - Additional Margin) / (1 - Maintenance Margin Rate) * Contract Multiplier * Positions)
Margincall Price of Short Positions = (Positions * Contract Multiplier * Average Opening Price + Initial Margin - Service Charges + Additional Margin) / (1 + Maintenance Margin Rate) * Contract Multiplier * Positions)
Margin rate:
Margin rate = (Position margin + Unrealized profits and losses) / Currentposition value = (Position margin + Unrealized profits and losses) / (Positions held * Contract multiplier * Latest trading price)
For example:
Assuming that the latest trading price of BTC is $10,000, the user buys 1,000 lots of positive contracts with a 10X leverage at a risk limit level of 1, and a maintenance margin rate of 0.5%.
In that case,the user’s initial margin rate = 1 / 10 = 10%
=0.0001*1000*10000/10=100 USDT
Margin = Contract multiplier * Lots * Latest trading price / (Leverage ratio) = 0.0001 * 1,000 * 10,000 / 10 = 100 USDT
The margin-call price is: (Positions held * Contract multiplier * Average opening price - Initial margin) / ((1 - Maintenance margin rate) * Contract multiplier * Positions held) = (1,000 * 0.0001 * 10,000-100) / ((1-0.5%) * 0.0001 * 1000) = 9,045.2261
When the latest trading price of BTC declines to $9,045, the index price will be $9,055.5
Unrealized profits and losses = Contract multiplier * Latest trading price * Positions held - Contract multiplier * Average opening price * Positions held = 0.0001 * 9,045 * 1,000-0.0001 * 10,000 * 1,000 = - 95.5
In that case,the margin rate = (Opening margin + Unrealized profits and losses) / Current position value = (100-95.5) / (9,045 * 0.0001 * 1,000) = 0.497% < 0.5%
However, because the index price ($9,055.5) does not reach the margin-call price ($9,045.2261), there will be no margin-calls.

What is a manual variation margin
Users can manually increase the amount of margin of specific positions for accurate risk control. After the margin changes, the leverage and margin-call price will change correspondingly.

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