CoinEx｜What are the calculation methods of margin rate?

When playing the contract, the calculation method of the margin rate is crucial, it is related to whether your position will be forced to close. However, the calculation methods of the margin rate of different trading platforms are different. Some margin rates are lower than a certain value and will be liquidated, while some margin rates are higher, and the risk of liquidation will be greater. Let's take a look at the calculation methods of the margin rate on different platforms.

1. CoinEx

Currently, CoinEx supports both isolated and cross margin modes.

In the isolated position mode, the margin rate = (position margin) / opening value;

In cross-margin mode, margin rate = (available margin + position margin) / open position value.

Among them, position margin = initial margin + additional margin - reduced margin + unrealized profit and loss.

When the Bitcoin price is 30,000 USDT, 1 BTC is long with 10x leverage, and a starting margin of 3,000 USDT is prepared. At this time, the Bitcoin price drops by 5%, and the marked price reaches 28,500 USDT, and there is no other margin in the position. (For the convenience of calculation, the following calculation process does not include transaction fees)

At this time, margin rate = (available margin + initial margin + additional margin - reduced margin + unrealized profit and loss) / opening value = (3000-1500) / 30000 = 5%.

In CoinEx, when your margin rate is lower than the maintenance margin rate, the position will be forced to close. That is, the lower your margin ratio, the higher the risk of your position being liquidated.

2. Binance

Binance's contract margin ratio is calculated as follows: margin ratio = maintenance margin / margin balance, maintenance margin is the minimum margin balance required to maintain a position, margin balance = wallet balance + unrealized profit and loss.

When the bitcoin price is 30,000 USDT, and 1 BTC is long with 10x leverage, we have prepared a starting margin of 3,000 USDT. At this time, the bitcoin price drops by 5%, and the mark price reaches 28,500 USDT. There is no other margin in the position. 1 BTC corresponds to the tier level 1, and the maintenance margin rate is 0.4%.

At this time, maintenance margin = opening value * maintenance margin rate = 30000 * 0.4% = 120U;

Margin Ratio = Maintenance Margin / Margin Balance = 120/(3000-1500) = 8%

On Binance, your positions will be liquidated when the margin ratio reaches 100%. That is, the higher your margin ratio, the higher the risk of your position being liquidated.

3. Huobi

Unlike the above two exchanges, Huobi uses the calculation method of the guaranteed asset rate. It is calculated as follows:

Isolated position mode: Guaranteed asset rate = (account equity / occupied collateral assets) * 100% – adjustment coefficient;

Cross-margin mode: Guaranteed asset ratio = account equity / ∑ of all contracts in the cross-margin account (occupy margin assets * adjustment coefficient) – 100%;

Account equity = account balance + realized profit and loss for the current period + unrealized profit and loss for the current period;

Among them: Occupied collateral assets = position collateral assets + frozen collateral assets, position collateral assets = contract face value * contract number of open positions * latest transaction price/multiple.

When the Bitcoin price is 30,000 USDT, and 1 BTC is long with 10 times leverage, the contract face value is 0.001 BTC, which is 1,000 net positions, and the adjustment factor is 7.5%. In addition, we have prepared 3000USDT of collateral assets. At this time, the Bitcoin price fell by 5%, and the mark price reached 28500USDT. There are no other collateral assets in the position.

At this point, the position collateral asset = the face value of the contract * the number of contracts held * the latest transaction price/multiple = 0.001 * 1000 * 30000 / 10 = 3000 USDT

Account Equity = Account Balance + Realized Profit and Loss for the Current Period + Unrealized Profit and Loss for the Current Period = 3000-1500 = 1500 USDT

Guaranteed Asset Rate = (Account Equity/Occupied Guaranteed Assets)*100%–Adjustment Factor=(1500/3000)*100%–7.5%=42.5%

In Huobi, when your collateral asset ratio is less than or equal to 0%, the user's position will be forcibly closed by the system. That is, the lower your margin ratio, the higher the risk of your position being liquidated.

There are many ways to calculate the contract margin rate. Different platforms need to pay attention to different calculation methods. From the perspective of the calculation process, the calculation method of the margin rate of Huobi is the most complicated, and the calculation method of CoinEx is much simpler.