Initial Margin is the amount of collateral required to open a position for Leverage trading.

 

**The initial margin shown in the position tab includes an estimated taker fee to close the position.

 

Inverse Perpetual

For Inverse Perpetual, margin is calculated and settled in the base coin / underlying cryptocurrency (for example BTC in BTCUSD contracts).

To calculate the initial margin, the system will take the Contract value/Leverage. The initial margin rate depends on the leverage used. Assuming you are using 100x leverage for 100 BTC contract value, you would only need to invest 1 BTC (plus a fee to exit) as your initial margin (1/100).

 

IM calculation: 

Initial Margin = (Contract Quantity / Mark Price) / Leverage


The estimated closing position fee calculation varies depending on the position direction: Long/Short
    Fee to Close (Buy Order) = (Contract Quantity / Order Price) × [1 + 1 / Leverage] × Taker Fee Rate
    Fee to Close (Sell order) = (Contract Quantity / Order Price) × [1 − 1 / Leverage] × Taker Fee Rat

 

For example:

A trader buys 12,000 BTCUSD contracts at 8,000 USD (based on Mark price)  with 50x leverage.

= 12,000/ 8,000 /50

= 0.03 BTC

The initial margin for this position is 0.03 BTC (plus a fee to close)

Estimated Fee to close position = 12,000 / 80,000 × (1 + 1 / 50 ) × 0.06% = 0.0008820  BTC

In this case, the initial margin for the position is 0.003 + 0.00088200 = 0.030882 USDT (*which keeps changing as Mark price moves)

 

USDT Perpetual

IM calculation: 

Initial Margin = Position Value* / Leverage

  *Position Value = Position Size × Mark Price

 

Estimated Fee to Close Position 

Fee to Close (Buy Order) = Position Size × Position Average Entry Price × (1 − 1 / Leverage) × Taker Fee Rate

Fee to Close (Sell Order) = Position Size × Position Average Entry Price × (1 + 1 / Leverage ) × Taker Fee Rate

 

For example:

Trader A places a 0.5 BTC buy order for $70,000 with 50x leverage. Assuming the Mark price is now $70,500.

 

Initial Margin = (0.5 × 70,500) / 50 = 705 USDT

Estimated Fee to close position = 0.5 × 70,000 × (1 − 1 / 10 ) × 0.06% = 20.727 USDT

In this case, the initial margin for the position is:

705 + 20.727 = 725.727  USDT(*which keeps changing as Mark price moves)

 

Important Note:

－ Since the Initial Margin calculation involves Mark Price, and Mark Price updates in real time, your Initial Margin requirement will also fluctuate accordingly.

－ Using higher leverage reduces Initial Margin but it will increase liquidation risk on the other hand.