Dear Dcoin users:
In the field of derivatives, margin refers to the amount required to buy and sell leveraged positions. Entrusted margin and maintenance margin refer to the minimum guarantee amount required to open a position and the minimum guarantee amount required to maintain this position, respectively. Since different users have different trading strategies, Dcoin perpetual contracts use two different modes of margin mechanism:
Cross mode: Margin is shared among positions. When needed, the position of a contract will withdraw more margin from the account balance to avoid liquidation.
Isolated mode: The margin allocated to a certain position is limited to a certain amount. If the margin of the position falls below the maintenance margin level, the position will be forced to liquidate.
Cross mode, also known as "intertemporal margin", refers to the use of all available balance to avoid forced liquidation. Any other positions that have realized profits can help increase margin on losing positions.
This method is useful for investors who hedge their existing positions, and it is also suitable for arbitrageurs who do not want to expose one side of their positions to risk due to liquidation.
Please note that by default, all positions are initially set to "wide margin".
In this mode, your maximum loss is limited to the commission margin used. When a position is forced to close, any of your available balance will not be used to increase the margin of this position.
Margin by position is useful for speculative positions. By isolating the margin used by a certain position, you can limit the loss in this position to the amount of the entrusted margin, thus helping you when your short-term speculative trading strategy fails. In a turbulent market, a highly leveraged position may quickly lose margin.