ViaBTC Hedging Service is similar to the Short Selling in margin with low multiple. The margin rate includes Initial Margin Rate, Risk Margin Rate, Maintenance Margin Rate, etc. It is a manifestation of the security status of current hedging orders.
When you create a hedging order, only hedging coin is accepted as initial margin. However, when you are holding a hedging order at hand, hedging assets and USDT assets will be included in margin rate calculations.
Calculation of Margin Amount
ViaBTC Hedging Service sets 20% as the fixed initial margin rate.
Initial Margin = ( Hedging Amount - Initial Margin) * 20%.
Based on the above, we can also get the formula: Initial Margin = Hedging Amount / 6
There are 2 conditions to create a hedging order:
If there is no hedging order in your account: Available Margin = Total Hedging Assets.
If there is a hedging order already, Available Margin = Total USDT Assets in Hedging Account / Index Price+ Total Hedging Assets - 120% * To-be-repaid Amount
Formula of Margin Rate
1) Margin Rate = (Total Assets in Hedging Account - Frozen Assets - To-be-repaid Amount) / To-be-repaid Amount * 100%
2) Margin Rate = (Total USDT Assets in Hedging Account / Index Price+ Total Hedging Assets - Frozen Assets - To-be-repaid Amount) / To-be-repaid Hedging Amount * 100%
Initial Margin Rate
ViaBTC Hedging Service provides all hedging coins with the fixed 6X leverage ( fixed 20% initial margin ratio). When creating a hedging order, here are the calculation for Initial Margin Rate:
1) Initial Margin Rate = Total Net Assets in Hedging Account / To-be-repaid Amount * 100% = 20%
2) Initial Margin Rate = Initial Margin / (Hedging Amount- Initial Margin) * 100% = 20%
3) Initial Margin Rate = Initial Margin / (Initial Margin * 6-Initial Margin) * 100% = 20%
Alert Margin Rate
If Margin Rate is less than or equal to Alert Margin Rate, the system will send notifications to remind you to increase margin in hedging account for asset security reason.
Alert Margin Rate = Maintenance Margin by each gradients + 3%. Learn more information at Maintenance Margin Level System.
Maintenance Margin Rate
If Margin Rate is less than or equal to Maintenance Margin Rate, the system will trigger a forced liquidation operation for your hedging order. ViaBTC Hedging Service sets Maintenance Margin Level System for different hedging amount and hedging coins. Learn more information at Maintenance Margin Level System.
There are 3 security levels for Margin Rate: "Dangerous", "Normal" and "Safe".
Dangerous: Maintenance Margin Rate ≤ Margin Rate < Maintenance Margin Rate+5%
Normal: Maintenance Margin Rate+5% ≤ Margin Rate < Initial Margin Rate (20%)
Safe：Initial Margin Rate (20%) ≤ Margin Rate
Available Transfer-out Amount
If there is no hedging order, all the available hedging coin (Hedging Asset- Frozen Assets) and USDT assets in Hedging Account can be transferred out.
If the current Margin Rate is rated as "Dangerous" or "Normal" (Margin Rate < 20%), the assets CANNOT be transferred out.
If the current Margin Rate is rated as "Safe" (Margin Rate ≥ 20%), the assets over Initial Margin can be transferred out.
Theoretical Formula for Available Transferable Amount
Available Transferable Amount (Hedging Coin) = Total USDT Asset / Index Price + Total Hedging Asset - 120% * To-be-repaid Amount - Frozen Asset
Available Transferable Amount (USDT) =Total USDT Asset + (Total Hedging Assets - 120% * To-be-repaid Amount-Frozen Asset) * Index Price = Available Transfer-out Amount (Hedging Coin) * Index Price
Actual Transferable Amount
If the available Hedging Coin (or USDT) ≤ Theoretically Transferable Amount, then Actual Transferable Amount= Available Hedging Coin (or USDT).
If the available Hedging Coin (or USDT) > Theoretically Transferable Amount, then Actual Transferable Amount = Theoretical Transferable Amount.