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▶ Margin and Leverage

Support Staff
  • Updated on

▶ Collateral:

WOO X supports the cross-margin mechanisms for spot-margin and futures. Kindly note that all eligible assets will count towards collateral for your futures and margin positions. You can deposit cryptocurrencies as collateral, such as USDT, BTC, and ETH. WOO X defines the collateral ratio for each token, which represents the equivalent USDT value as your equity. Please see the complete info of collateral ratio from Collateral ratio.

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▶ Leverage:

The maximum amount of leverage available depends on the notional value of your position. The initial leverage is 10x by default. WOO X provides up to 50x leverage at the account level in Futures mode. Please adjust your leverage, positions, and collateral accordingly for risk controls. The Initial Margin calculations will be determined by the leverage you selected.

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▶ Margin Ratio:

The margin ratio defines your risk level of equity relating to exposure. A higher margin ratio will lead to a lower risk level. The default margin ratio is set to 1,000%, indicating you haven’t opened any position. The more positions you open, the lower your margin ratio is.

Note: If you have open positions in the future market, you are not allowed to change to spot-margin mode. Please close all futures positions to change to different trading modes.

 

▶ Explanation:

  1. Maintenance margin requirement (MMR) and account leverage:
    1. Account leverage = Abs( Order_Qty + Current_Qty ) * Mark_Price / Total_Collateral
    2. MMR = Max( 0.6 / min( maxLeverage_i, max( account_leverages ) ), 0.6 * imr_factor.i * (holding_notional.i)^(2/3)) + 0.03%
  2. Estimate liquidation price: 
    1. If the order quantity >0
      1. If current_quantity + order_quantity > 0, est_liq_price = Mark_Price * ( 1 + MMR - 1 / Account_Leverage )
      2. If current_quantity + order_quantity <= 0, est_liq_price = Mark_Price * ( 1 - MMR + 1 / Account_Leverage )
    2. If order quantity < 0
      1. If current_quantity <= 0, est_liq_price = Mark_Price * ( 1 - MMR + 1 / Account_Leverage )
      2. If And(current_quantity > 0, order_quantity + current_quantity <= 0), est_liq_price = Mark_Price * ( 1 - MMR + 1 / Account_Leverage )
      3. If And(current_quantity > 0, order_quantity + current_quantity > 0), est_liq_price = Mark_Price * ( 1 - MMR + 1 / Account_Leverage )
  3. Initial margin:
    1. IMR.i = Max( 1 / min( maxLeverage_i, maxLeverage_account ), imr_factor.i * (open_notional.i)^(2/3)) + 0.06%)
    2. Total initial margin = Sum( open_notional.i * IMR.i )
  4. Total collateral:
    1. Total collateral = = Sum( ( holding_i + interest_i + pendingShortQty_i ) * discount_i * mark_price.i ) + unrealized_pnL
    2. discount_i := collateral_ratio_i if holding_i + interest_i + pendingShortQty_i >= 0 else 1
  5. Free collateral:
    1. Free collateral = Total_Collateral - max( unrealized_pnl, 0 ) - Total_IM

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