In the virtual contract market, traders only need to pay a small number of funds at a certain rate 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.
Initial margin refers to the minimum amount of collateral required to open a position in a leveraged trading.
Initial margin = position value / leverage
Note that the actual order cost will be reserved for open taker transaction fee; however, the actual transaction fee will be paid when the order is executed and calculated based on the actual transaction price. When all orders are completed, if there is still remaining after deducting the actual fees, it will be automatically returned to the available assets.
Initial margin ratio = 1/leverage
Order cost calculation
Order cost = initial margin + liquidity taker fee for opening a position
Opening fee = contract face value x contract size x liquidity taker fee rate / order price
Note that the closing fee does not freeze the corresponding fee
Maintenance margin is the minimum amount of margin required for a trader to continue to hold a position. When the margin level used for a position is lower than the maintenance margin level, the position will be forced to close.
Maintenance margin = maintenance margin ratio x opening position value = maintenance margin ratio x contract face value x contract size / opening price
Maintenance margin ratio
The maintenance margin ratio is the minimum margin ratio required by the holder to maintain the current position. When the margin ratio is less than or equal to the holder's current required margin ratio, the forced closing of the position will be triggered.
Margin ratio = account equity / open position value