Initial Margin Calculation
In contract trading, the initial margin refers to the amount of collateral needed to open a position. The amount of initial margin is affected directly by the position and the leverage. Under the same position, the higher the leverage, the lower the initial margin required; under the same leverage, the higher the position, the higher the initial margin required.
Calculation formula：
- Coin-margined contracts (Inverse contract)
Initial Margin Calculation=opening quantity x contract face value/(leverage multiple x average opening price)
- USDT-margined contracts (Forward contract)
Initial Margin Calculation = average opening price x opening quantity x contract face value/leverage multiple
For example：
- Coin-margined contracts (Inverse contract)
If a trader submits a limit order of 10,000 BTCUSD at a price of 7,000 with 25x leverage, and the face value of the contract is 1 USD each, the user's margin will be calculated as follows:
The user's margin = 10000x1/（7000x25）= 0.0571 BTC
- USDT-margined contracts (Forward contract)
If a trader submits a limit order of 10,000 BTCUSD at a price of 7,000 with 25x leverage, and the face value of the contract is 0.0001 BTC each, the user's margin will be calculated as follows:
The user's margin= 10000x1x7000/25= 280 USDT
Margin in cross position mode includes initial position margin and available balance.
If you want to know more, please refer to the following documents:
The difference between USD-M futures and Coin-M futures