How does the maintenance margin work exactly? Its at 15%
If you use maximum leverage, your initial margin is 30% - out of your total position size, you pay for 30% yourself and take out swap to pay for the other 70%. The amount you owe to the swap provider remains fixed, so as the price goes against you and the total value of your position shrinks, the percentage of it that's marked as "owed" increases, and the amount that you own "yourself" shrinks. If that part shrank to 0% you'd have a position worth exactly what you owe and would absolutely have to be liquidated immediately to avoid loss. For safety, the margin call comes when 'your' portion is 15%
So if you started out with the price at $200, with $100/0.5BTC of your own, you'd be able to borrow and sell another 1.166BTC to get $233, bringing you up to a total of $333 of which you provided $100 (30%). You'll continue to owe your swap provider 1.166BTC, so your position remains open until the position as a whole is worth 1.372BTC - at that point you have 1.166 owed and 1.372-1.166 = ~0.2BTC owned, (and 0.2 is 15% of 1.372, or at least it is when you use the exact numbers rather than these rounded versions)
Since you have $333, the specific price point where that's worth 1.372BTC is $242/BTC, but the maximum distance from your starting price will vary - it'll be the same
percentage difference each time, so long as you always use the same degree of leverage, and it'll be more "forgiving" (further away) if you use less leverage, since you then start out owning a larger percentage of your position, so it takes longer to shrink down to 15%
tl;dr: Your margin call comes when (Position value - Swap debt)/Position value ≤ 15%
Or to rearrange that a bit, when Position value = Swap debt/0.85 (since your swap debt is a fixed quantity you can calculate that one ahead of time and work out what pricepoint implies that position value)
Yes thanks for the explanation. I was used to margin and initial margin when it came to stocks but here its confusing because it BTC. Thanks for the formula it makes sense.
So if I start out with a price of $200. with $100/0.5BTC of my own and I only sell another 0.5BTC in swap. So my total sell order is 1.0BTC
I currently have 0.5BTC and I borrow another 0.5BTC. So my swap dept is =0.5BTC
Position Value = 0.5/0.85 = 0.588 BTC
So with a starting price of $200, the margin call would occur at $200 / 0.588 = $340 ?
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