Bitcoin futures contracts, as well as CFDs are highly leveraged. To keep these positions open, traders are required to hold a percentage of the value of the position on the exchange, known as the Maintenance Margin percentage.
Initial Margin (Investment)
The Initial Margin is the amount you need to use from your available margin to open the position you selected with the desired leverage.
With 100x leverage, traders only need 1% of their nominal trade value to open a trade. That 1% is the margin required.
For example, to buy 10,000 lot BTCUSD with a BTC account, when the BTC price is 5000 USD, the margin requirement is 10,000/100 = 100 USD, aka 100/5000 = 0.02 BTC.
Maintenance Margin (Risk Ratio)
Maintenance margin is the minimum amount of equity that an investor must maintain in the margin account after the trade has been made.
If you cannot fulfill your maintenance requirement, you will be liquidated.
Right now the maintenance margin is set as 30% of the initial margin. That means, your position will start being liquidated when your initial margin has 30% left.
KoinPro uses a partial liquidation process, which helps to protect the benefits of our traders.
When the account equity is dropped to 30% of the margin used by the position in the account, KoinPro will liquidate the positions, starting from the one with the largest loss.
If a partial liquidation is performed, and there is still open position left in the account, the risk ratio (maintenance margin ratio) is re-calculated based on the open position size. If the risk ratio is bigger than 30%, the account won't be liquidated.