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MCS | Maintenance Margin in Bitcoin Margin Trading?

3 months ago

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*This post has been written by Hedgehog, an MCS influencer and one of Korea's famous cryptocurrency key opinion leaders.

#Be_a_Trader!

Greetings from MCS, the derivatives trading platform where traders ALWAYS come first.

Today, I will explain about the maintenance margin that you must know when trading Bitcoin margin on the MCS cryptocurrency derivatives exchange.

🎯 What is the Maintenance Margin?

A Maintenance Margin is also called a minimum maintenance margin. A maintenance margin refers to the minimum margin required to maintain a position after opening one. If this minimum margin is not maintained, the position will become liquidated by the system.

In the case of BTCUSDT perpetual contract on the MCS cryptocurrency derivatives exchange, the maintenance margin rate is 0.5%. Please note that the minimum maintenance margin rate may change depending on the risk. Therefore, the liquidation price for the BTCUSDT perpetual contract on MCS is set at a price of 0.5% which is the same as the maintenance margin rate of the position 0.5%.

- A margin of a position starts with an initial margin and may increase or decrease according to UPNL (unrealized profit and loss).

For instance, if you want to enter 10,000 contracts by setting leverage of 100 times at $10,000, the maintenance margin and the liquidation price for this position are as follows:

💡 Initial margin = 10,000 (contract quantity) / 10,000 (price) / 100 (leverage) = 0.01 BTC

- For those MCS traders who are not familiar with the initial margin calculation, please refer to this link.

The value of the above position is 1 BTC, and the starting margin is 0.01 BTC (1%), but as soon as the UPNL of the position becomes negative when the price reaches $9,852 (the position's margin becomes 0.005 BTC (0.5%)), the position is automatically liquidated.

Therefore, the liquidation price of a position is set to the price corresponding to the point when the maintenance margin rate of the position becomes 0.5% of the position value.

Today, we have learned about the maintenance margin. In the next post, I will explain the simple way to calculate the liquidation price of a position.

       

I am a Bitcoin margin trader, Hedgehog. Thank you for reading this post.

             

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Thank you.

           

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Published 3 months ago