Isolated margin Trading Rules

Isolated Margin Trading Rules Explained

On the crmclick.io platform, when users engage in margin trading, their positions are displayed in the form of isolated margin positions. Below is a detailed explanation of the isolated margin trading rules:

1. Isolated Margin Position Terminology

• Position Assets: The positive asset quantity, including the margin. For long positions, this is the trading currency; for short positions, this is the quote currency.
• Available Assets: Position assets minus the portion occupied by close orders.
• Liabilities: Initial liabilities plus accrued interest. For long positions, liabilities are in the quote currency; for short positions, liabilities are in the trading currency.
• Interest: Accrued but unpaid interest.
• Entry Price: Weighted average price based on the original position and new position transaction prices, calculated as follows: Entry Price=Original Position×Original Entry Price+New Position×Transaction Price/Original Position+New Position​

2. Liquidation Price Calculation

• Long Position: Liquidation Price=(Liabilities+Interest)×(1+Maintenance Margin Rate)×(1+Taker Fee Rate)/Position Assets​
• Short Position: Liquidation Price=Position Assets/(Liabilities+Interest)×(1+Maintenance Margin Rate)×(1+Taker Fee Rate)​

3. Profit Calculation

• Long Position Profit: Profit=Position Assets−Margin−Liabilities+Interest/Mark Price​
• Short Position Profit: Profit=Position Assets−Margin−(Liabilities+Interest)×Mark Price
• Return on Investment: ROI=Profit/Initial Margin​

4. Margin Balance Calculation

• Long Position: Initial Margin=Position Size/Leverage​
• Short Position: Initial Margin=Position Size/Leverage×Entry Price
• Maintenance Margin:
  • Long Position: Maintenance Margin=(Liabilities+Interest)×Maintenance Margin Rate/Mark Price​
  • Short Position: Maintenance Margin=(Liabilities+Interest)×Maintenance Margin Rate×Mark Price
• Margin Ratio:
  • Long Position: Margin Ratio=Position Assets−(Liabilities+Interest)/Mark Price/Maintenance Margin+Fees​
  • Short Position: Margin Ratio=Position Assets−(Liabilities+Interest)×Mark Price/Maintenance Margin+Fees​

5. Closing Position Principles

Closing a position can only be done using position assets, and the position is closed once the liabilities are repaid. Users can choose whether to use "Reduce Only" when closing.

• Market Close: Only repays liabilities, with the remaining assets transferred back to the account balance. The default setting is "Reduce Only."
• Limit Close: Can sell more than the liabilities, repaying the liabilities to complete the close. The excess assets are transferred back to the account balance.

6. Risk Control Checks

• Warning Parameter: When the margin ratio < 300%, the system will issue a margin call warning to the account.
• Forced Liquidation: When the margin ratio < 100%, forced liquidation is triggered, and any opposing orders are canceled. Part or all of the isolated margin positions will be handed over to the liquidation engine.

Example

Suppose a user is using isolated margin to go long 1 BTC in the BTC/USDT pair with 10x leverage. They need 0.1 BTC as margin, and the transaction price is 10,000 USDT, requiring a loan of 10,000 USDT. This results in a long position with position assets of 1.1 BTC and liabilities of 10,000 USDT.

Risk Control and Forced Liquidation

When the margin ratio < 100%, the liquidation engine will partially liquidate the position. For example, if a user holds 3,299,800 USDT in assets and 110 BTC in liabilities, when the mark price rises from 19,500 USDT to 29,000 USDT, the margin ratio will decrease, triggering the liquidation process. Positions will be liquidated in stages until the margin ratio is >100%. If the margin ratio remains <100% after reducing to the lowest tier, the entire position will be handed over to the liquidation engine at the bankruptcy price.

crmclick.io is committed to providing users with a safe, transparent, and efficient isolated margin trading experience. These rules will help users better manage risks and achieve stable returns.

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