Maintenance Margin Ratio is the lowest required Margin Ratio for a user to maintain the current open position(s). When the Margin Ratio of the account is lower than the Maintenance Margin Ratio + Forced-Liquidation Fee Rate.
Fixed Margin Mode: Margin Ratio = (Fixed Margin + UPL) / Position Value
Cross Margin Mode: Margin Ratio = (Balance + RPL + UPL) / Position Value
Position Value = Face Value x Number of Futures / Latest Mark Price
This tiered Maintenance Margin Ratio system is adopted to avoid the liquidation of large positions, causing big impact on market liquidity. Basically, the larger the positions held, the higher Maintenance Margin Ratio will be required, and the lower the Leverage will be available.
Under Fixed Margin Mode, the Number of Futures, Tier, and the Maintenance Margin Ratio are calculated based on the specific position.
Under Cross Margin Mode, the Number of contracts, Tier, and the Maintenance Margin Ratio are calculated based on all the positions. If a user opened weekly, bi-weekly, quarterly and bi-quarterly positions in the same underlying, our system will count the total number of contracts he/she holds and place him/her in the respective tier. For example, if a user opened 10,000 BTC weekly contracts, 5,000 bi-weekly contracts, 5,000 quarterly contracts and 5,000 bi-quarterly contracts, the total number is 25,000, which is tier 3.
Example: Tiered maintenance margin ratio for BTC Futures