Phemex uses a sophisticated risk control system and liquidation model to support high leverage trading by adopting the Maintenance Margin model. For the latest updates, please refer to the Leverage & Margin page.
What are maximum position, maximum leverage, and Initial Margin Rate?
The maximum amount of leverage available depends on the notional value of your position — the larger the position, the lower the leverage. You can adjust the leverage according to your needs, and all position sizes are calculated based on the contract's notional value. Thus, the Initial Margin is determined by the leverage you selected.
Please note that you should first choose your leverage (and fulfill the Initial Margin requirement) before opening positions. The higher the leverage, the smaller the notional size you can open; the lower the leverage, the higher the notional size you can open.
The system will display the maximum allowable position size for different tiers of leverage as shown below:
What is the Maintenance Margin?
The Maintenance Margin is a critical term used in trading, specifically in futures. It refers to the minimum amount of collateral that a trader must maintain in their account to keep their leveraged position open. The Maintenance Margin is calculated based on the value of a trader's open positions at different notional value tiers.
Maintenance Margin = Notional Position Value * Maintenance Margin Rate - Maintenance Amount
Please refer to the Leverage and Margin table for the most updated information regarding Notional Position Values, maximum leverages, and the corresponding Maintenance Margin rates and maintenance amounts.
The Maintenance Margin is calculated based on your positions at different notional value tiers. This means that the Maintenance Margin is always calculated in the same way, regardless of what leverage you select. Moving from one tier to another will not cause the previous tier to change its leverage. The larger the position, the higher the Maintenance Margin rate.
It is important to note that the Maintenance Margin will directly affect the liquidation price. To avoid auto-deleveraging, it is highly recommended to close your positions before the collateral falls below the Maintenance Margin.
Maintenance Margin Rate
Maintenance margin calculations are done via a “Bracket” setup and are always calculated the same way, regardless of what leverage you choose. Moving from one bracket to another will not cause the earlier bracket to change its leverage. To avoid auto-liquidation, you should liquidate positions before the collateral falls below the Maintenance Margin.
