The buying power indicates the max quantity of the quote token you can buy while still satisfying the margin requirements.
It varies based on the adjusted collateral, initial margin, collateral ratio, total balance, mark price, order price, and pending orders.
- When your adjusted collateral <= initial margin, you can only buy the quantity that is deemed to make a borrow position towards closure.
- When your adjusted collateral > initial margin and pending long balance - pending short quantity >= 0:
- Your buying power is larger when your adjusted collateral is larger, the buy token’s balance & pending long orders are smaller, the initial margin is smaller, and the order price is smaller.
- When your adjusted collateral > initial margin and pending long balance - pending short quantity < 0:
- Your buying power is larger when your adjusted collateral is larger, the buy token’s balance - pending short quantity is larger, the mark price is larger, and the initial margin is smaller.
Let’s use BTC as an example here:
Assuming that the BTC mark price is 10,000 USDT and its collateral ratio is 0.85.
Let’s say you have 100,000 USDT and enable the 5x leverage, the available buying quantity will be 34.11 BTC.
If the total amount of your order is lower than your balance, you are not borrowing. You will only start to pay the interest once you borrow the funds, please see the table below. We will use these scenarios in the following calculation:
|Quantity Buy (BTC)||BTC Price (USDT)||Spent (USDT)||Borrowed (USDT)|
Your balance and margin ratio will show the result in the corresponding behavior:
If you enable 5x leverage and use max buy with 34.11 BTC:
- Total Collateral = 34.11 * 10,000 * 0.85 + (-241,100 * 1 * 1) = 48,835
- Total Exposure = 241,100 * 1 = 241,100
- Margin Ratio = 48,835 / 241,100 * 100% = 20.26%
WOO X will stop you from borrowing more assets and placing orders due to the margin ratio being 20.26% which is very close to max out the leverage at 5x.
The system will calculate your available buying power in advance. For example, if you have 100,000 USDT, here is the available buying power with different collateral ratios and leverages:
|Available Buying Power (USDT)|
|3x leverage on||5x leverage on|