BingX Perpetual Futures has introduced the Auto Margin Addition feature for the isolated margin mode. Let's delve into the details.
1. What is Auto Margin Addition in Isolated Margin Mode?
Due to the isolated nature of the funds in isolated margin mode, there is still a risk of forced liquidation even when there is sufficient available margin in the user's account.
Auto Margin Addition is a feature that allows traders to automatically add margin to their existing isolated margin position with the purpose of avoiding forced liquidation. Once the Auto Margin Addition feature is enabled, whenever your position is about to trigger forced liquidation, the system will add an amount that you set to the position, thereby reducing the risk of forced liquidation.
This feature is turned off by default. Users need to go to the "Position" and select "Auto Margin Addition" to manually enable it.
1. If your available margin is less than the amount set, then the actual added amount will be your available margin. However, this could result in the loss of all available margin in your futures account in extreme cases.
2. When the Auto Margin Addition is triggered, the system will cancel pending orders (if any) of the trading pair that occupy margin. This ensures that there are sufficient funds for automatic margin addition, thereby reducing the risk.
3. After the margin is added, if the position risk calculated according to the current mark price is still ≥ 100%, the available margin in the futures account is ≤ 0, and there are no pending orders (for opening positions) that can be canceled under the current margin account, the system will take over the liquidated contract at the bankruptcy price.
2. Examples of How Does Auto Margin Addition Work
A trader with an available balance of 2,500 USDT opens a position with information as follows:
Trading pair: BTC/USDT
Open price: 20,000 USDT
Open size: 0.5 BTC
Initial margin used: 1,000 USDT
Estimated liquidation price: 18,069.2 USDT
Remaining available margin: 1,500 USDT
Margin set for auto addition: 1,000 USDT
When the mark price drops to 18069.2 USDT, which is the forced liquidation price, the Auto Margin Addition will be triggered to prevent the position from being liquidated.
Added margin: 1,000 USDT
Remaining available margin: 500 USDT
New estimated liquidation price: 16,061.5 USDT
New initial margin for this position: 2,000 USDT
If the price of BTC/USDT continues to fall and reaches the new liquidation price of 16,061.5 USDT, the Auto Margin Addition will kick in again. At this time, the available balance is less than the margin set by the user.
Added margin: 500 USDT
New estimated liquidation price: 15,057.7 USDT
Now there is no available margin left in the account. When the price reaches 15,057.7 USDT, the position will be liquidated as the Auto Margin Addition cannot work in case of no available margin.
BingX Operation Team
BingX Official Channels
Cryptocurrency prices are subject to high market risk and price volatility. You should only invest in products that you are familiar with and where you understand the associated risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material is for reference only and should not be construed as financial advice.Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up, and you may not get back the amount you invested. You are solely responsible for your investment decisions. BingX is not responsible for any losses you may incur.
BingX attaches great importance to compliance and has strictly abided by local regulations. Please obey local laws and regulations in your country or region. BingX reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reason without prior notice.