Phemex employs an advanced risk management system and liquidation model to facilitate high-leverage trading through the Maintenance Margin approach. For the latest updates, please consult the Leverage & Margin page.
What are the maximum position, maximum leverage, and Initial Margin Rate?
The maximum available leverage is contingent on the position value — larger positions entail lower leverage. Leverage can be adjusted to suit individual preferences, with all position sizes computed based on the contract's position value. Thus, the Initial Margin(Initial Margin = Position Value / Leverage) is determined by the chosen leverage.
It's essential to select your leverage (and meet the Initial Margin requirement) before opening positions. Higher leverage translates to a smaller position value you can open, while lower leverage enables a larger position value.
What is Maintenance Margin?
Maintenance Margin is a crucial term in trading futures. It represents the minimum collateral needed to keep a leveraged position open. The amount is determined by the value of the trader's open positions across different tiers of position values. The Maintenance Margin calculation is consistent across all leverage options. Moving between tiers doesn't affect the previous tier's leverage. Higher positions require a higher Maintenance Margin rate.
It's vital to note that Maintenance Margin directly impacts the liquidation price. To avoid auto-deleveraging, it's recommended to close positions before the collateral drops below Maintenance Margin.
How to Calculate Maintenance margin?
Minimum maintenance requirements will vary depending on what Symbol you are trading and how much leverage you are using.
Taking BTCUSDT USDT-M as an example:
For a Position Value of 3,000,000, of which 2,000,000 is in Tier 1 and the remaining part 3,000,000 - 2,000,000 = 1,000,000 is in Tier 2, the maintenance margin is 2,000,000 * 0.50% + (3,000,000 - 2,000,000) * 0.75% = 17,500.
For more information, please refer to this article.
