πŸ›‘οΈ 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 πŸ”

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 πŸ”’

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 πŸ’Ό

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 πŸ’°:

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:

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