#### What is Margin?

- Margin is a good-faith deposit, or an amount of capital one needs to post or deposit to hold position.
- Dcoin provides Fixed Margin Mode
- Fixed Margin mode: Initial Margin = Face Value * Number of Perpetuals * Average Position Price / Leverage, the Position Margin remains the same even the price fluctuates.

#### The relation between Margin required and Leverage?

- Leverage allows traders to enter a position which is worth much more by committing only a little amount of money. The gain or loss is therefore, greatly magnified.
- When a user opens a certain position, the required Initial Margin = Position Value / Leverage.
- Example: If the current BTC price is 10,000 USDT/BTC, and a user wants to open a 10x long position of perpetual swap that is worth 1 BTC, the Number of Perpetuals opened is Number of BTC / Face Value = 1/0.0001 = 10000. Initial Margin= Face Value * Number of Perpetuals * Average Position Price / Leverage = 0.0001 * 10000 * 10000 / 10 = 1000 USDT

#### Margin Ratio

- Initial Margin Ratio: 1 / Leverage
- Maintenance Margin Ratio: the lowest required margin ratio for maintaining the current open positions. When the Margin Ratio drops below the Maintenance Margin Ratio+ Forced-Liquidation Fee Rate, forced liquidation will be triggered.
- Calculation formula of Margin Ratio: Margin Ratio = (Fixed Margin + UPL) / Position Value

For example

Let the price of 1 BTC be USD 10,000, a user who selected Fixed Margin Mode opens a 10x long position of 1 BTC. The Number of Perpetuals opened will be 10000, and the Maintenance Margin Ratio will be 1.50%

Initial Margin = Face Value * Number of Perpetuals * Average Position Price / Leverage = 0.0001 * 10000 * 10000 / 10 = 1000 USDT

The Initial Margin Ratio for this position is 1 / 10 = 10%

When the price of 1 BTC falls to $9010, the UPL = Face Value * Number of Perpetuals * Latest Mark Price - Face Value * Number of Perpetuals * Average Position Price = 0.0001 * 10000 * 9010 - 0.0001 * 10000 * 10000 = -990 USDT

Then the Margin Ratio = (Fixed Margin + UPL) / Average Position Price = (1000 - 990) / (0.0001 * 10000 * 9010) = 10 / 9010 = 0.11%, which is smaller than the required Maintenance Margin Ratio + Forced-Liquidation Fee Rate=1.55%, so forced liquidation will be triggered.

#### Can I add margin manually?

- Yes. However you may only do so in Fixed Margin Mode. Simply enter the amount of margin you would like to add for your positions to reduce liquidation risk.

#### Adjusting the Leverage of open positions

- Fixed Margin mode: Initial Margin = Face Value * Number of Perpetuals * Average Position Price / Leverage

Dcoin's perpetual swap allows Leverage level adjustment for open position. If a user who wants to increase the Leverage level, our system will check whether it has reached the tier's limit before allowing the adjustment. After the adjustment, the required maintenance margin will be lowered.

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