1. What is maintenance margin and margin rate?
Maintenance margin is the minimum amount of equity required for a user to maintain their current position. Margin rate is the percent ratio of your account equity to maintenance margin. When your margin rate is less than or equal to 100%, a forced reduction or liquidation will be triggered.
For each position under Isolated Margin Mode:
Margin Rate = (Used Margin + Unrealized PnL) / (Maintenance Margin + Estimated Liquidation Fee)
For Cross Margin Mode:
Single-asset Position Margin Rate = (Cross Margin Account Balance + Unrealized PnL) / (Maintenance Margin + Estimated Liquidation Fee)
Multi-asset Position Margin Rate = (Cross Margin Account Balance + Unrealized PnL) / Σ(Maintenance Margin + Estimated Liquidation Fee)
2. Why does CoinW implement a tiered margin rate system?
Our tiered margin rate system is adopted to avoid the impact of forced liquidation of large positions. As a rule of thumb, the larger your position and leverage ratio is, the higher your maintenance margin rate.
3. How to calculate your positions and tiers?
Under Isolated Margin Mode, your position tiers will be calculated on a per-position basis.
Under Cross Margin Mode, your position tiers will be calculated on a per-trading pair basis.
4. Maintenance Margin Rate gears for each Contract
Head to our futures trading page, click on "Trading Rules", and select the "Position Tier" tab. Note that our "Position Limit" is calculated in the number of contracts.
Liquidation & Insurance Fund
1. At CoinW, forced full or partial liquidation for futures positions will be triggered by your margin ratio dropping below 100%.
2. You can calculate the estimated liquidation price for your positions with our built-in calculator on our futures trading page.
The estimated liquidation price is for reference only. Under the cross-margin mode, since your margin ratio will be affected by all your futures positions across different trading pairs, there is no way to calculate an estimated liquidation price for each position.
3. CoinW futures implements a tiered liquidation mechanism, in which the system will try to partially liquidate a portion of a position to lower its position tier until the margin rate is over 100% again or your entire position is liquidated. This is a risk control mechanism CoinW implements to avoid large liquidation orders, causing huge impacts on market liquidity.
4. When the index price of the underlying goes above (for short positions) or under (for long positions), our liquidation engine will take over your affected position and attempt to close it with a market order. In this liquidation process, any loss incurred will be compensated by CoinW's Insurance Fund, while any profit will also go into our Insurance Fund.
5. Insurance Fund
CoinW's Insurance Fund is our futures market's financial protection, consisting of our reserve and the remainder of forced liquidation orders.
Every day at 8:00:00 (UTC), CoinW will settle all profit and loss from forced liquidation orders to the Insurance Fund in the past 24 hours in our futures market.
Please note that CoinW may modify, add, or delete content from this announcement to optimize your trading experience. We recommend checking this announcement regularly for the latest information, as CoinW will not provide additional notifications.