Maintenance margin refers to the amount of funds needed in your trading account to keep a derivatives position open. If there are not enough funds in your trading account to match the maintenance margin, your open positions will be liquidated.
The formula for maintenance margin is:
Maintenance Margin = (minimal maintenance margin percentage + position margin multiplier*maximum absolute position)*absolute position value
- The minimal maintenance margin percentage is a fixed percentage that the trader must pay to keep a derivatives position open.
- The position margin multiplier increases the maintenance margin requirements in proportion with larger position sizes.
- The maximum absolute position is the largest position that a trader can obtain if their open orders are filled.
- The absolute position value is the sum of all positions, where buys are positive (e.g., buying 1,000 contracts increases the position value by 1,000) and sells are negative (e.g., selling 1,000 contracts decreases the position value by 1,000).
Maintenance Margin Example
If you want to go long or short on BTC-PERP, the maintenance margin will be calculated as a fixed percentage plus the margin required that is related to the size of your position. As you increase the size of your position, the position margin multiplier increases the required maintenance margin.
Suppose a trader is long with 100,000 BTC-PERP contracts and the mark price is 10,000. The absolute value of that position is 10 BTC and given the position margin multiplier is 0.000001%, the position will require an extra 0.10% of margin (since [100,000*0.000001%] = 0.1%) on top of the minimal maintenance margin percentage.
The maintenance margin is calculated using the absolute position value (10 BTC) multiplied by the sum of the minimal maintenance margin percentage (0.50% for BTC-PERP) and the extra margin that depends on the position size of your trade:
=(minimal maintenance margin percentage + position margin multiplier*maximum absolute position)*absolute position value
=[0.50% + (100,000*0.000001%)]*(10 BTC)
=(0.50% +0.10%)*(10 BTC)
= 0.06 BTC
If your BTC-denominated account value falls below 0.06 BTC, your open positions will be liquidated.
Consider the same example, but the number of contracts is increased to 200,000. The maintenance margin will then increase to:
=[0.50% + (200,000*0.000001%)]*(20 BTC)
=(0.50% + 0.20%)*(20 BTC)
= 0.14 BTC
A doubling of the position size increases the maintenance margin by more than double.
How Maintenance Margin is Displayed
The maintenance margin for any open positions is shown by the red section of the margin wheel.
Click on the margin wheel to zoom in and hover over the red section to show the maintenance margin requirement:
The inside of the margin wheel shows the sub-accounts maintenance margin requirement as a percentage of the available balance, which changes colour as the risk of liqudiation increases. For instance, for percentages below 10%, it is shown as white.
Between 10% and 30%, the percentage is shown in orange:
Above 30%, the percentage turns red, and once above 65%, it flashes to indicate the higher risk associated with the open position(s):
Any open orders will be cancelled if the sub-account's available balance approaches the maintenance margin requirement. If after open orders have been cancelled, the balance is not enough to reach the maintenance margin, any open positions for that sub-account are liquidated.
The maintenance margin requirement is also shown by the positions panel:
To display the maintenance margin requirement for a different asset, navigate to the instruments panel and select the trading pair. The margin wheel and the positions panel will both display the maintenance margin for any open positions for that trading instrument.
To view the maintenance margin requirements across all assets for the selected sub-account, click the Deposit button and navigate to Balances:
Note: the maintenance margin requirements are displayed for the selected sub-account. Balances/positions in each sub-account are isolated from each other. To see the maintenance margin requirements for a different sub-account, go to the account menu and select the sub-account.
Maintenance Margin for Instruments on Interdax
The minimal maintenance margin percentage and position margin multiplier for derivatives on Interdax are shown below.
The figures below can be used for the relevant instrument and inserted into the formula outlined above to calculate the maintenance margin for a given position:
|| Minimal Maintenance Margin Percentage
|| Position Margin Multiplier