In contracts trading, traders can apply 1x to 100x leverage. The higher the leverage, the base maintenance margin required for the same position will be reduced proportionally, and the leverage is inversely proportional to the margin. With the use of leverage, premature liquidation will also change. The higher the leverage, the higher the risk.
WBFutures provides cross margin mode and fixed margin mode. The default position is 100x for cross margin mode and for fixed margin mode, the leverage is customisable from 1x to 100x.
Take BTC / USDT Perpetual Contract as Example
In the WBFutures trading system, the value of each BTC / USDT contract is 0.01 BTC, the minimum trading unit is 1, and if the trader chooses 1x leverage to trade 1 contract, the total cost equals to the contract face value.
If a trader opens a position of 1 contract using 100x leverage, the locked margin of this transaction is equal to contract face value / 100, and the locked margin of this transaction equals the total cost.
In this example:
Contract face value = 0.01 (BTC) * 9961 (USDT) * 10 (units) = 99.61 (USDT)
Locked Margin = 99.61 (USDT) / 100 = 0.996 (USDT)
After an order is placed, the leverage multiple can still be adjusted according to the trader's risk tolerance. For example, when the trader needs to leave the market temporarily, he/she can choose to reduce the leverage ratio, and the locked margin will increase in proportion at this time to reduce the risk of premature liquidation that may cause by the period market swings.
March 23, 2020