*This post has been written by Hedgehog, an MCS influencer and one of Korea's famous cryptocurrency key opinion leaders.
Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.
This article explains the initial margin that you must know when trading bitcoin margin on the MCS cryptocurrency derivatives exchange.
🎯 What is Initial Margin?
Initial Margin means the margin required when opening a position. The initial margin will vary depending on the entry price and leverage used.
🎯 Initial Margin Equation
In order to know how much initial margin is required when opening a position, you need to know the value of the position you want to open. The formula for calculating the position value is as follows.
💡 Position Value = Contract Quantity / Entry Price
If you want to buy 10,000 contracts at a price of $10,000, the value of this position is 10,000 (contract quantity) / 10,000 (entry price), which is 1 BTC.
If you have obtained the value of the position you want to open, you can now find the required initial margin according to the leverage you have set.
💡 Initial Margin = Position Value / Leverage
For example, suppose you want to buy 10,000 contracts at a price of $10,000, and the leverage you set is 10x.
The position value is 1BTC as obtained above, so the initial margin is 1 BTC/10 (leverage), which will be 0.1 BTC.
In summary, if you want to purchase 10,000 contracts for $10,000 with 10x leverage, the required starting margin will be 0.1 BTC, and of course, you must have a balance of 0.1 BTC or more in the available balance to submit the order.
Today, we have learned about initial margin, and next time, we will explain the maintenance margin that is essential to know when trading with margin.
I am a Bitcoin margin trader, Hedgehog. Thank you for reading this post.
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