How Do I Margin Trade on Phemex (How-To User Guide)

As a new feature now available on the Phemex, margin trading allows users to trade with leverage on the spot market using borrowed funds. For more information on what margin trading is, check out What is Margin Trading?

Here is a step-by-step guide on how to margin trade on Phemex.

Enabling Margin Trading and Placing Order

1. Register or make sure you’re logged into your Phemex account

2. In order to margin trade, you must first enable the feature. Visit your Assets overview page and go to your Margin Trading Account. Click the button Enable Margin Trading.

3. After clicking, you will be led to the margin trading interface with a pop-up service agreement. Read the agreement carefully and if you wish to proceed, click Agree & Enable Margin Trading

4. Now you’re set to start. To margin trade, you must fund your Margin Trading Account with collateral. You can do so by transferring assets from your other accounts such as Spot Wallet to your Margin Trading Account. Note that only certain assets can be used as collateral for margin trading, check the list of assets here.

5. After there is collateral in your Margin Trading Account, you can now trade on margin by borrowing funds. There are two ways to borrow. You can do so manually by clicking Borrow on the trading interface, entering the amount you’d like to borrow, and clicking Confirm.

6. The second borrowing option is to auto-borrow. To do this, click the Auto Borrow tab under the order type. The available balance shown includes your Margin Trading Account balance as well as the maximum amount you can borrow. Now if you click to Margin Buy an order, the system will automatically borrow the amount that your order needs.

7. Note that your Max Borrow amount = min (margin account net value*(max leverage – 1) – borrowed amount, individual max borrow amount, system remaining loanable amount).
   • The “margin account net value” corresponds to the coin’s Collateral Coefficient found at the bottom of the Margin Data page. Margin account net value  = sum (coin1 net value * coefficient1 + coin2 net value * coefficient2 + …)

8. Interest is calculated hourly. Once an order with borrowing is placed successfully, one hour interest will be calculated immediately. Hourly Interest = borrowed amount * hourly interest rate 

Hourly interest rate can be referenced on the Margin Data page

9. There are two ways to repay your margin trading loans. The first is to do so manually by clicking Repay on the trading interface, inputting repayment amount, and clicking Confirm.

10. The second repayment option is Auto-repay. To do this, click the Auto Repay tab under the order type. Now if you place the order, then the system will automatically repay some or all of your loans based on actual order value. Note that all repayment will first pay off the interest, then the principal.

Margin Level and Risk Control

Margin Level = Total Asset Value of Margin Account / (Total Liabilities + Total Interest)

Total Asset Value of Margin Account = Total Market Value of All Digital Assets in the Margin Account

Total Liabilities = Total Market Value of All Outstanding Margin Loans in the Margin Account

Total Interest = Sum of interest for borrowed assets

Margin Level

Margin Call and Liquidation

Margin trading on Phemex is cross-margin, so you can trade all the supported margin trading pairs with your Margin Trading Account. Note that this means when liquidation occurs, all assets in your Margin Trading Account may be liquidated. Phemex Margin Trading allows for partial liquidation, meaning if during the liquidation process your margin level returns to a safe level, then liquidation will stop and you are able to maintain the remaining position.

The risk level is calculated based on all the assets and liabilities in your Margin Trading Account. When the margin level of your Margin Trading Account reaches 1.3, a margin call will be triggered. You will receive an email and push notification to transfer more collateral into your Margin Trading Account to avoid liquidation.

When the margin level reaches 1.1, the liquidation engine will take over your positions and the following liquidation steps will begin:

1. Active orders will be canceled
2. Available balances will be used to automatically repay for the same coin
3. Some/all of your collateral will be sold automatically to repay your debt in order to bring your margin level to a safe level
4. Liquidation fee: 2% of liquidated assets. All liquidation fees go to the insurance pool