Dear Bitunix Community,
We are glad to inform you about the recent system upgrade and highlight some key updates that have been implemented to enhance your trading experience on Bitunix. Several crucial updates have been carefully implemented to elevate and refine your overall trading experience within the Bitunix ecosystem. We believe that staying informed about these updates will empower you to navigate the Bitunix trading environment more effectively, ensuring a seamless and rewarding experience. Here are the featured updates about futures trading:
-
Cross positions Margin rate
The risk measurement of the assets in a cross-margin account for futures has evolved. In the old version, the margin rate of a futures position was actually a "risk ratio," where a higher value indicated greater risk. The new version's margin rate directly reflects the proportion of the account's margin to the maintenance margin, with its value approximately being the reciprocal of the original risk ratio. The current margin ratio is calculated as the total cross-margin / sum of all maintenance margins * 100%.
A. Total Cross-Margin: This includes the estimated liquidation fees for the current positions and the opening fees for the current pending orders. This setup is designed to prevent sudden changes in the account's risk level due to the execution of pending orders, which could trigger the liquidation of the position.
B. Maintenance Margin Ratio (MMR) for Cross-Margin: This includes the MMR for both positions and orders. The reason for considering orders in the maintenance margin is to prevent forced liquidation when the actual execution of full-margin orders causes a sharp increase in the maintenance margin.
Summary: The new version of the margin rate directly reflects the ratio of account margin to maintenance margin, with its value being approximately the reciprocal of the original risk ratio. A higher margin rate indicates lower risk. Conversely, a lower rate (closer to 100%) indicates higher risk and approaches liquidation.
-
Optimization of the Calculation of Liquidation Price in Cross-Margin Mode
Cross-margin mode allows all cross-margin positions to share margins and profits/losses. A. Originally, when calculating the liquidation price, the total cross-margin was used as the available margin for each contract to calculate its liquidation price, making the liquidation price for each cross-margin position relatively favorable. However, as prices fluctuate, the change in the liquidation price for each position could be quite significant.
B. In the new calculation of the liquidation price, the total cross-margin is allocated to each position according to the proportion of the maintenance margin of the positions, and then the liquidation price is calculated. Compared to the original algorithm, the liquidation price displayed by the initial position may be slightly worse than the old algorithm, but the range of change in the liquidation price will be smaller, closer to the actual price at the time of liquidation.
Note: Liquidation in cross-margin is triggered when the margin ratio ≤ 100%, and the liquidation price is for reference only. When focusing on position risk, please pay attention to the margin ratio.
Example
User's futures account has a balacee of 1,000 USDT, and two cross, long positions are opened:
|
Futures | Leverage
|
Open Price
|
Amount
|
Margin (Before)
|
Liquidation price (Before)
|
Margin (After)
|
Liquidation price (After)
|
|---|---|---|---|---|---|---|
|
BTCUSDT | 10x
|
60000
|
0.1
|
1000
|
50600
|
500
|
55600
|
|
ETHUSDT | 10x
|
6000
|
1
|
1000
|
5060
|
500
|
5560
|
PS：Fees are not considered in the example
When the price drops, the unrealized PnL of the positions will be added to the total margin 1000+(55600-60000)*0.1+(5560-6000)*1=120
|
Futures | Leverage
|
Mark price
|
Amount
|
Margin (Before)
|
Liquidation price (Before)
|
Margin (After)
|
Liquidation price (After)
|
|---|---|---|---|---|---|---|
|
BTCUSDT | 10x
|
55600
|
0.1
|
120
|
54956
|
60
|
55556
|
|
ETHUSDT | 10x
|
5560
|
1
|
120
|
5495.6
|
60
|
5555.6
|
As can be seen above, as price gets closer to liquidation price, the change in the liquidation price of the new algorithm is very small, while the change in the liquidation price of the old algorithm will be much larger compared with the gap.
Summary: The cross-margin mode allows all cross-margin positions to share the margin and profits/losses. In cross-margin mode, when a user holds multiple positions and there is significant price volatility, the fluctuation in the liquidation price is smaller (compared to the old version), making the new version of the liquidation price more favorable for users to manage risk.
Tip: When users hold multiple positions in cross-margin, they should focus on the margin ratio rather than the displayed liquidation price when assessing the risk of liquidation. This approach allows for more accurate judgment.
-
Enhance funds utilization
Unrealized profit can be used as margin cost to open new positions. This means that traders, while holding existing positions, can leverage their unrealized profits to enter into additional trades.
-
Open Position with Liquidation Price Protection
The new version of the futures has implemented a liquidation check at the time of position opening. It assesses whether opening a new position or the hypothetical execution of the order would trigger the liquidation of the position. This is to prevent situations where an order causes the maintenance margin ratio of the position to increase, or the total cross-margin to decrease, leading to the forced liquidation of the position.
Thank you for your continued trust and support. If you have any questions, our support team is here to help. Just reach out to us via our live support or at support@bitunix.com .
Best Regards,
Bitunix Team
March 4 2024