1. What is margin
In the virtual contract market, traders only need to pay a small amount of funds at a certain ratio according to the contract price as a financial guarantee for the performance of the contract, and then they can participate in the trading of the contract. This kind of funds is the virtual contract margin.
USDT contract starting margin = contract multiplier * quantity * price / leverage
Currency-based contract initial margin = contract multiplier * quantity / (leverage * price)
2. The relationship between margin and leverage
Leverage is a common financial transaction system, namely the margin system. While "leverage" enlarges the investor's tradable amount, it also enlarges the investors' gains and risks. To
Examples are as follows (USDT contract):
Assuming that the latest transaction price of BTC is $10000, and the user uses 10 times leverage to open 1000 more positive perpetual contracts,
The number of multiple contracts opened by the user = the number of multiple contracts opened = 1000 contracts.
The user's required margin = contract multiplier * number of contracts * latest transaction price / (leverage multiple) = 0.0001*1000*10000 / (10) = 100 USDT
Reminder: High leverage has high yield and high risk. Please understand the risk before using it.
3. The relationship between initial margin rate and leverage
Initial leverage: the user’s selected opening leverage
Actual leverage ratio = current position value/(position margin + unrealized profit and loss)
Margin rate: = 1/actual leverage ratio = (position margin + unrealized profit and loss) / current position value