Calculation of Perpetual Margin

What is a Margin?

In the digital currency futures market, traders only need to pay a small amount of funds at a certain ratio based on the futures price as a financial guarantee for fulfilling the contract, and can participate in the buying and selling of the contract. This type of funds is called digital currency futures margin.

Tips: Nexus Prime currently defaults to and only supports cross currency full cross mode. Other methods are yet to be opened, please refer to the feature on the page as a benchmark.

How to calculate the margin?

Nexus Prime provides two types of margin systems, full warehouse margin and warehouse by warehouse margin (the isolated margin mode is not currently open, subject to the actual opening of the client).

In full warehouse mode, all available funds in the user account are considered as available margins.

Calculation method for USDT standard futures margin:

Initial margin=Initial margin=postion value * (1 / Leverage).

In the isolated mode, each position calculates the margin separately, and the profit and loss do not affect each other.

The relationship between margin and leverage

Leverage is a common financial trading system, known as the margin system. Leverage not only amplifies the tradable amount of investors, but also increases the returns and risks they receive.

Taking the full position as an example, when a user opens a certain number of positions over or short, the initial margin=position value/selected leverage multiple

For example:

Currency standard contract

Assuming the current BTC price is $10000, the user wishes to use 10 times the leverage to open a perpetual futures equivalent to 1 BTC. The number of multiple BTC opened by the user=number of multiple BTC opened * BTC price/face value=1 * 10000/100=100.

Initial margin=face value * number of sheets / (BTC price * leverage ratio) = 100 * 100/ (10000 * 10) = 0.1 BTC

Margin ratio

Initial margin ratio: 1/leverage ratio

Maintain Margin Rate: The minimum margin rate required for users to maintain their current position.

Calculation formula for margin ratio:

Single currency margin - full warehouse:

Margin ratio = (full position balance of the currency + full position return - number of orders sold in the currency - number of options purchased in the currency - number of orders opened in each position - all order handling fees) / (maintenance margin + clearance handling fees).

Cross currency margin :

Margin ratio = adjust equity / (maintenance margin + Handling Fee of Closing the postion)

Adjustment of position leverage ratio

The NexusPB digital currency futures provides the function of position leverage adjustment. When the user wishes to increase the leverage, the system detects that the adjusted leverage ratio is less than the maximum leverage ratio of the current number of sheets, and the adjustment is successful. After adjustment, the required margin for opening the current position will be reduced. When users lower their leverage, the required margin for holding positions will increase. When the system detects that there is enough available balance in the account to be added, the leverage ratio for holding positions can be successfully adjusted (whether the adjustment is supported depends on the platform display).