Liquidating margin

On Bit MEX a similar system exists where at 0.5% (not 1%) of the position size you are liquidated is taken from your position upon liquidation in order to cover the spread to push it into the market, and build a liquidation fund to help smoothen forced liquidation processing.

Crypto Facilities similarly has thresholds for liquidation, but because they have a strictly no socialized loss risk system, they actually return any remaining equity to the trader, unless in case of termination where the portfolio value is transferred to the winning trader (that’s a whole different story.)The reason I’ve gone over all this background about initial margin and maintenance margin is to illustrate a point about setting proper stop losses.

That’s a lot better than letting your position get liquidated so you have 0 left, right?

liquidating margin-24

The value of getting out of your position before liquidation hits in this case is saving 1 BTC.So this is not trivial, you get to save 20% of your equity on the trade rather than paying the insurance fund/other traders!Now the way the futures risk management systems work is they require this initial margin at open, but they also require that you hold a minimum amount of equity (the market value of your position vs the initial margin you put down) to keep the position “alive”.FOREX and other legacy markets are liquid enough that when you hit maintenance margin then your broker liquidates you at market price and you get the leftover of maintenance margin vs.Contracts at OKCoin are inverse and worth 0 a piece.

Your liquidation price on this position then is

Your liquidation price on this position then is $1,009.62, about $40 below your entry: This is the 5% “initial margin” mentioned earlier (4.762 is about $5,000, 5% of the $100,000 position of 1,000 contracts).From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.But if you put down $5,000 on your $100,000 position at OKCoin, for example, you will get margin called once you have only $1,000 in margin left.When we talk about “something X” (6x, 10x, 20x, 50x, 100x)…leverage in bitcoin trading its the same as (100/amount X)% initial margin requirement.In effect we are talking about how much equity you need to put down to take a certain position.This is also known as “initial margin”, i.e., the initial amount of margin needed to make a trade.

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Your liquidation price on this position then is $1,009.62, about $40 below your entry: This is the 5% “initial margin” mentioned earlier (4.762 is about $5,000, 5% of the $100,000 position of 1,000 contracts).

From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.

But if you put down $5,000 on your $100,000 position at OKCoin, for example, you will get margin called once you have only $1,000 in margin left.

When we talk about “something X” (6x, 10x, 20x, 50x, 100x)…leverage in bitcoin trading its the same as (100/amount X)% initial margin requirement.

In effect we are talking about how much equity you need to put down to take a certain position.

This is also known as “initial margin”, i.e., the initial amount of margin needed to make a trade.

,009.62, about below your entry: This is the 5% “initial margin” mentioned earlier (4.762 is about ,000, 5% of the 0,000 position of 1,000 contracts).From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.But if you put down ,000 on your 0,000 position at OKCoin, for example, you will get margin called once you have only

Your liquidation price on this position then is $1,009.62, about $40 below your entry: This is the 5% “initial margin” mentioned earlier (4.762 is about $5,000, 5% of the $100,000 position of 1,000 contracts).From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.But if you put down $5,000 on your $100,000 position at OKCoin, for example, you will get margin called once you have only $1,000 in margin left.When we talk about “something X” (6x, 10x, 20x, 50x, 100x)…leverage in bitcoin trading its the same as (100/amount X)% initial margin requirement.In effect we are talking about how much equity you need to put down to take a certain position.This is also known as “initial margin”, i.e., the initial amount of margin needed to make a trade.

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Your liquidation price on this position then is $1,009.62, about $40 below your entry: This is the 5% “initial margin” mentioned earlier (4.762 is about $5,000, 5% of the $100,000 position of 1,000 contracts).

From the exchange’s point of view, they want to make sure that you are able to keep paying the profits of the person on the other side of your trade.

But if you put down $5,000 on your $100,000 position at OKCoin, for example, you will get margin called once you have only $1,000 in margin left.

When we talk about “something X” (6x, 10x, 20x, 50x, 100x)…leverage in bitcoin trading its the same as (100/amount X)% initial margin requirement.

In effect we are talking about how much equity you need to put down to take a certain position.

This is also known as “initial margin”, i.e., the initial amount of margin needed to make a trade.

,000 in margin left.When we talk about “something X” (6x, 10x, 20x, 50x, 100x)…leverage in bitcoin trading its the same as (100/amount X)% initial margin requirement.In effect we are talking about how much equity you need to put down to take a certain position.This is also known as “initial margin”, i.e., the initial amount of margin needed to make a trade.