Universal Account
Universal accounts allow traders to trade spot and perps from a single account, making it easier to manage trades. However, it is still important to remember to use proper risk management when trading in a universal account. Working spot can reduce your collateral balance, therefore increasing your margin ratio.
Portfolio Margin
Portfolio margin is automatically enabled to boost capital efficiency right from the get-go. Portfolio margin means that your unrealized PnL on a position can be used as collateral to maintain your other open positions. In other words, your profits on one position can offset losses on another position from a margining perspective.
Each parent and sub-account is margined separately and independently. Balances, collateral, and position limits are not aggregated across accounts. This means that within a single sub-account, all positions and working orders are cross-and-portfolio-margined using all of the sub-account's collateral and unrealized PnL. Trading with isolated margin can be achieved by splitting collateral between sub-accounts and trading a single market in each sub-account.
Each account has two sets of margin requirements - initial and maintenance margins. Both working orders and open positions result in increased margin requirements.
Definitions
Note that all margin calculations are denominated in OX. Your OX balances update in real-time to reflect unrealized PnL.
Collateral Balance (OX) = WB*(OX) + Non-OX Coins OX-Value
Available Collateral (OX) = Collateral Balance - Portfolio Margin
Portfolio Margin (OX) = Minimum amount of collateral required to support open positions and working orders
Maintenance Margin = Minimum amount of collateral required to avoid liquidation
Margin Ratio (%) = 100 * Maintenance Margin / Collateral Balance
Multi-Collateral
This section provides an overview of the newly implemented multi-collateral functionality on our platform. Previously, our system accepted only OX as collateral. Multi-collateral support allows users to leverage different types of coins as collateral, eliminating the need to convert your holdings into OX solely for collateral purposes. A list of supported assets and associated LTV's can be found here.
We actively monitor the liquidity and volatility of assets and will adjust LTVs and limits according to market conditions. While we strive to provide a two-day notice for any updates to collateral limits and LTVs, unexpected market movements may necessitate adjustments with little notice. Therefore, regularly check the website for any notices regarding risk limits and adjust your positions accordingly.
The full formula for collateral balance is:
Collateral Balance = WB(OX) + unrealized OX PnL + sum(ELTV*Coin Quantity*Index Price/OX Index Price), where:
Effective Loan to Value (ELTV) = min(Base LTV), 1 /(LTV Factor*sqrt(Coin Balance) + 1)
Example
Let's assume the following values:
Coin Balance (ETH): 10 ETH
WB(OX): 1,000,000 OX
unrealized OX PnL: -200,000 OX
LTV Factor: 0.04
Base LTV: 0.9
ETH Index Price: $2500
OX/USDT Index Price (USDT): 0.01
ELTV = min (0.9, 1/(0.04 * sqrt(10))+1)
ELTV = min (0.9, 0.888)
ELTV = 0.888
Then calculating Collateral Balance
Collateral Balance = 1000000 + (-200000) + 0.888 * 10 * 2500/0.01
Collateral Balance = 3020000
Margin Ratio Thresholds
There are two key position liquidation thresholds to keep in mind.
>=50% Margin Ratio; Collateral Balance <= Initial Margin
Cannot place new risk-increasing (position size increasing) orders.
>= 100% Margin Ratio; Collateral Balance < Maintenance Margin
The liquidation process will commence
*Margin information is available via the markets page and is also available via API for algorithmic traders.
Calculating Margin Requirements
The full formula for portfolio margin is:
To find the maintenance rate and maintenance amount of your positions you can find them in the trading rules section of each trading page, calculating your notional position (qty*mp*multiplier) and finding the lowest position limit larger than your current OX notional position.
Considering the below portfolio with only two positions:
Market | Open Contracts | Position (Contracts) | Current Mark Price | Max Leverage | MR | MA |
BTC/USD Perp | 0.01 | +1 | 27,500 | 10x | 5% | 0 |
ETH/USD Perp | 0.1 | -10 | 2,000 | 5x | 10% | 50,000 |
The required portfolio margin is calculated using the following, derived from the general formula described in the documentation above:
PortfolioMargin(IM) = (1/10)*abs(1+0.01)*27,500*100+(1/5)*abs(0.1-10)*2000*100 OX
PortfolioMargin(IM) = 673,750 OX
Maintenance Margin (MM) = 286,875 OX
Based on the above calculations, your account would require a Portfolio Margin (Initial Margin) value of 673,750 OX to open these positions. In order to maintain these positions, a Maintenance Margin value of 286,875 OX would be required.
Calculating Estimated Liquidation Prices
Given that a portfolio margin approach is used, the initial and maintenance margin required is a function of all the positions and orders in your portfolio combined. In practice, a trader’s portfolio margin requirements and collateral balance are going to fluctuate as prices change, making it impossible to accurately determine what the actual liquidation prices will be for the given portfolio.
However, getting an estimated liquidation price is important for traders. Hence we have come up with an Estimated Liquidation Price calculation as a handy reference to help traders know at what price their positions are theoretically at risk of liquidation:
Three important things to note about the estimated liquidation price:
It is just an estimate. This is a first-order approximation to the liquidation price for that particular contract position, assuming nothing else changes.
It becomes more accurate as the 'mark price' gets closer to the liquidation price.
Often prices fall together. This could mean your positions could get liquidated at much higher price levels as other positions have also worsened
Estimated Liquidation Price Formula
Estimated Liquidated Price = OX Multiplier *Mark Price - (Collateral Balance - Maintenance MarginPosition) / OX Multiplier
Mark Price is the current mark price
Collateral Balance is the 'post-haircut' collateral value
Maintenance Margin is the current maintenance margin
Position is the contract position. negative for short positions
OX Multiplier of the given market, typically equal to 100.
Estimated liquidation prices can be calculated for each position.