1. About the automatic margin call function
Automatic margin call is a function that allows traders to automatically add margin to their existing positions to prevent forced liquidation. After the automatic margin call function is turned on, when forced liquidation is about to be triggered, your contract available margin will be automatically added to your position. Currently, this function is only supported for position-by-position positions.
The amount of margin automatically added each time is the maintenance margin amount of the position. If the available margin is insufficient, the user's order will be cancelled, and as a preferred method, a certain amount of margin will be released, and the remaining available margin will be added to the position margin. Once the margin is called, the forced liquidation price will deviate further from the mark price.
2. Automatic margin call formula
Each automatic margin call amount = opening price * quantity * face value * maintenance margin rate
3. Example:
A user opened 5,000 BTC/USDT long position with 100x leverage, the transaction price was 18,000 USDT, and the estimated liquidation price was 17,891.94 USDT;
If the mark price drops to the liquidation price of 17,891.94 USDT, the automatic margin call process will be carried out to prevent the position from being liquidated. According to the automatic margin call formula, the margin call amount is calculated to be 7.2 USDT, and the new liquidation price after the margin call is 17,819.89 USDT.
If the BTC/USDT price continues to fall and reaches the new liquidation price of 17,819.89 USDT, the automatic margin call process will be carried out again. If the remaining available amount is lower than the required margin amount, the remaining margin is increased and a new estimated liquidation price is calculated.
4. Important Notes
(1) When liquidation is triggered, the system will first cancel all unfulfilled active orders to release more margin to prevent liquidation.
(2) Automatic margin call is only available in the position-by-position mode. This function is not supported in the full position mode.
(3) Understanding and effectively managing margin can help you better control risks in volatile markets. During trading, please always pay attention to risks and manage funds reasonably.