Example of Margin Ratio

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For example

Let the price of 1 BTC be USD 10,000, a user who selected Fixed Margin Mode opens a long position of 10000USD, which is approx. 1 BTC. Wants to have 10X leverage. The Number of contracts opened will be 10000, and the Maintenance Margin Ratio will be 0.5%,Forced-Liquidation Commission Fee Rate will be 0.075%.

Margin Locked = Face Value x Number of contracts / (Average Position Price x Leverage) = 1 USD x 10000 / (10,000 USD/BTC) / 10 = 0.1 BTC

Using liquidation formula, liquidation price = 9139


When the price of 1 BTC falls to $9139:
The UPL = Face Value x Number of contracts / Average Position Price - Face Value x Number of contracts / Latest Mark Price = 1 USD x 10000 / 10,000 USD/BTC - 1 USD x 10000 / 9,139 USD/BTC = -0.0942 BTC

Maintenance Margin = 0.005 * 1 USD x 10000 / (10,000 USD/BTC) = 0.005 BTC

Commission @ 9139 = 0.00075 * 1 USD x 10000 / (9139 USD/BTC) = 0.00082 BTC

Remaining margin <0:
= Locked margin + realised loss - maintenance margin - commission paid
= 0.1 - 0.0942 - 0.005 - 0.00082 = -0.00002 BTC

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