2024-10-28 02:28:23In margin trading, initial margin is the minimum margin required to open a position. The leverage used by traders directly affects the initial margin. The lower the leverage, the higher the initial margin required.
Let's take a look at how the initial margin in USDC perpetual & futures trading is calculated in Cross Margin mode. For the margin calculation under portfolio margin, please refer to Margin Calculations under Portfolio Margin.
Formula
Initial Margin = Position Size × Position Average Entry Price / Leverage
Example
Trader A places a 0.5 BTC contract at a price of $50,000 with 10x leverage.
Initial Margin = 0.5 × 50,000 / 10 = 2,500 USDC
Please note that the initial margin shown in the position tab includes the taker fee, which may be incurred in closing the position.
* Under cross margin mode, the initial margin cannot be adjusted. However, It will change according to your leverage changed.
The estimated closing position fee is calculated slightly differently, depending on the direction of the position — long or short.
Long Positions Formula:
Estimated Fee to Close Position = Position Size × Position Average Entry Price × (1 − 1 / Leverage) × Taker Fee Rate
Revisiting Trader A’s case: Trader A places a 0.5 BTC contract at a price of $50,000 with 10x leverage.
According to the calculation of the above example:
Estimated Fee to close position = 0.5 × 50,000 × (1 − 1 / 10 ) × 0.055% = 12.375 USDC
In this case, the initial margin for the position is (2,500 + 12.375), or 2,512.375 USDC.
Short positions Formula:
Estimated Fee to Close Position = Position Size × Position Average Entry Price × (1 + 1 / Leverage ) × Taker Fee Rate
Revisiting Trader A’s case: Trader A places a 0.5 BTC contract at a price of $50,000 with 10x leverage.
According to the calculation of the above example:
Estimated Fee to Close Position = 0.5 × 50,000 × (1 + 1 / 10 ) × 0.055% = 15.125 USDC
In this case, the initial margin for the position is (2,500 + 15.125), or 2,515.125 USDC.
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