Maintenance Margin: A minimum amount of a trader’s money he needs to keep his position open.
BTCMEX offers Leverage cryptocurrency trading. If the BTC/USD price drops (for Long positions) or goes up (for Short positions) too much, the exchange can potentially lose money during the event of a Liquidation. To guard against loss, the platform sets a typical margin requirement, which is calculated on the BTC Last Traded Price when the position will be opened – the Maintenance Margin.
To keep the position open a trader needs to fulfill the maintenance requirement – hold a minimum percentage of the value of the position. The Maintenance Margin prevents a position from being liquidated at a Bankruptcy Price – at which a trader would have lost all of his Margin.
The Maintenance Margin Rate on BTCMEX is 0,5% of the position value. BTCMEX Risk Limit policy applies for positions which value is BTC 200 or more. Starting from 200 for each BTC 100 increase in the position size, the Maintenance and Initial Margin requirements are increased by 0.5%.
The Maintenance Margin is calculated as:
The Number of Perpetual Contracts divided by the Order Price and multiplied by the Maintenance Margin Rate.
For example, if a trader buys 10,000 contracts at the BTC/USD price 8,125, his Maintenance Margin would be: (10,000/8,125)x0,5%=1.23×0.005=0.006 BTC.
If a trader uses 20x Leverage, his Initial Margin would be 10,000/(8,125×20)=0.06 BTC.
The unrealized loss for this position can not exceed 0,54 BTC (0.06-0.006).