▶ Why does the available buying power seems less than 5x when I enable the 5x leverage?

WOO X will pre-calculate the maximum buying power and margin usage rate when the user enables the margin trading. Collateral ratio, market price, and current assets can also affect the available buying power while trading. 

Note:  Margin usage rate = 100% / (Margin ratio * Maximum leverage)

Let’s use SOL as an example here:

SOL market price is 175 USDT, and the collateral ratio is 0.6. (Collateral ratio for each token will reduce the USDT value by a set percentage.) 

Assume that you have 10,000 USDT and enable the 5x leverage, the available buying power will be 16,666.66 (USDT) and the maximum quantity to buy will be 94.15 SOL on the order entry.

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:

Your balance and margin ratio will show the result in the corresponding behavior:

If you enable 5x leverage and use max buy with 94.15 SOL:

• Equity= (94.15 SOL* 175 Market Price of SOL)*0.6 collateral ratio+ (-6476.25 USDT)*1 collateral ratio = 3409.5
• Exposure= 94.15 SOL* 175 Market Price of SOL = 16476.25
• Margin Ratio = ( 3409.5 / 16476.23 ) * 100% = 20.69%
• Margin usage rate = 100% / (20.69% * 5 leverage) = 96.65%

WOO X will stop you from borrowing assets and placing orders due to:

1. The margin ratio will be 20.69% which is under the high risk.
2. The Margin usage rate is 96.65% which is almost hit 100% usage.

As the Margin trading rules and pre-calculation, users will be restricted from opening the positions if exceed the available buying power. 

The system will calculate your available buying power in advance. For example, If you have 10,000 USDT, here is the available buying power with different collateral ratios and leverages :