🛡️ Margin
Guide on how margin operates on ebi.xyz
Currently Ebi.xyz uses Isolated-margin, meaning collateral management is isolated on each single position. Cross margining, which allows traders to have share collateral cross positions in multiple markets, is planned for the future.
🍤 Margin Overview on Ebi.xyz
Engineered for the best trading experience, the margin calculations on ebi.xyz are similar to major exchanges. By default, ebi.xyz uses isolated-margining. This means when you open a position:
The collateral is specific to that position only.
The margin and potential losses are limited to the position itself, rather than affecting your entire account.
*Cross margin that allows traders to have positions in multiple market with shared collateral will be added in the future.
Margin checks upon opening an order 🔍
When a new order is placed to open a position, the system verifies that your account has sufficient initial margin. Initial margin checks apply to open position orders and specific reduce-only orders. Include open loss, which means the loss incurred if the market price moves away from your order price.
There is no margin check for close-position orders. Reduce-Only orders will also be subject to margin checks if they meet the same conditions above, treated as open position orders.
Reduce-Only Orders: These orders are designed to reduce or close a position and will undergo margin checks if they potentially increase the position size or exposure. They follow specific rules:
Market Close-All Reduce-Only Orders: If the margin is insufficient after placing such an order, all opposite-direction limit orders will be cancelled and the positions closed.
Better-Priced RO Orders: If a new limit RO order offers a better price closer to the market and exceeds the current position size, it will lead to cancellation of further-from-market-price RO orders in the same direction.
RO Stop Market Orders: These do not reserve initial margin when placed, but a margin check is performed when they are triggered. Insufficient margin at this point will lead to cancellation of all related orders and closure of positions.
Calculating Initial Margin 🔒
Initial Margin = Notional value of the position / leverage
This is the amount you need to open a new position. It's calculated based on the notional value of your position divided by the leverage, capped according to your risk tier.
Calculating Maintenance Margin and Auto-Liquidation Trigger 💼
Maintenance Margin = Notional Position Value * Maintenance Margin Rate - Maintenance Amount.
The maintenance margin is the minimum amount that must be maintained to keep a position open. If market volatility causes your account balance to drop below this level, Ebi.xyz may automatically liquidate your positions to settle outstanding balances, a process known as auto-liquidation.
Calculations are consistent across all leverage levels, safeguarded by a 'Bracket' system, meaning changing leverage levels doesn’t affect the maintenance requirements of previous brackets.
*To avoid auto-liquidation, you should liquidate positions before the collateral falls below the Maintenance Margin.
Margin Allocation for Orders 💰:
Whenever you place an order or open a position on ebi.xyz, a specific amount of USDT is allocated as collateral based on the position size and the selected leverage. This collateral becomes locked and non-withdrawable until the position is closed or adjusted.
Example: Alice has an initial balance of 100 USDT in her ebi account. She takes the following actions:
Opens a $500 position in the BTC perp market using 50x leverage, allocating USDT.
Opens a $100 position in the ETH perp market with 10x leverage, allocating USDT.
Places an order for a $1000 position in the XRP perp market with 20x leverage, allocating USDT.
After these transactions, Alice's available balance for withdrawal is USDT.
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