In this article, you will learn:
- How to calculate Cross Margin Pro Margin and Collateral Margin Levels
- The impact of different Cross Margin Pro Margin and Collateral Margin Levels
- Examples of Margin and Collateral Margin Level calculations
Cross Margin Pro uses a different method to calculate Margin Level compared to Cross Margin Classic, while the Collateral Margin Level remains the same for both. In this article, we will explain how they are calculated and how they function.
How are the Cross Margin Pro Margin Level and Collateral Margin Level calculated?
Parameter | Calculation | Description |
| Cross Margin Pro Margin Level | ∑Net Equity / ∑Maintenance Margin | The account’s total net equity divided by the total Maintenance Margin. |
∑Net Equity | ∑Asset - ∑(Liability + Interest) | Total asset value minus total liability and outstanding interest of the Cross Margin account (in USDT). *Total refers to the summation over all tokens. |
∑Maintenance Margin | ∑Loan amount in USDT * Maintenance Margin Rate Note: The Maintenance Margin Rate (MMR) for a particular token can be found here. | Total amount of Maintenance Margin (in USDT). *Total refers to the summation over all liability tokens. |
∑Initial Margin | ∑ Loan Amount * Initial Margin Rate Initial Margin Rate (IMR) = 1 / (Leverage - 1) | Total amount of Initial Margin (in USDT). *Total refers to the summation over all liability tokens. |
Available Margin | Max (∑Net Collateral - ∑Initial Margin, 0) | Available margin is used to determine the additional maximum borrowing amount. Learn how to calculate the maximum borrowing amount here. |
Collateral Margin Level | ∑Collateral Value / Total Liability | Collateral value refers to the asset value with haircut. |
∑Net Collateral | ∑Collateral Value - ∑(Liability + Interest) | Collateral Value refers to the asset value with haircut. |
Impact of Margin Level and Collateral Margin Level in Cross Margin Pro mode
Collateral Margin Level | Transfer | Convert to Cross Margin Classic (5x) |
Collateral Margin Level > 2 | Y | Y |
1.25 ≤ Collateral Margin Level ≤ 2 | N | Y |
Collateral Margin Level < 1.25 | N | Y/N* |
*You can switch back to 5x if your Margin Level (without haircut) in the Classic mode is higher than the Initial Risk Ratio (1.5 for Cross Margin 3x and 1.25 for Cross Margin 5x).
Note: In the Cross Margin Pro mode, the amount you can borrow depends on your “available margin”. Learn how to calculate the maximum borrowing amount here.
Margin Level | Trade | Margin Call | Liquidation |
1.5 ≤ Margin Level | Y | N | N |
1< Margin Level ≤ 1.5 | Y | Y | N |
Margin Level ≤ 1.0 | N | N | Y |
Examples
Note: The illustration below is a purely hypothetical example to demonstrate how Margin Level and Collateral Margin Level are calculated, as well as their impacts, in the Cross Margin Pro mode.
To calculate the maximum amount that can be borrowed for a specific liability coin and the Margin Level in the Cross Margin Pro mode, both the tiered collateral ratio and the Liability Coin Leverage table are required. Suppose the hypothetical collateral ratio and the liability coin maintenance/initial margin rate are as follows. Also, assume that the Interest is zero.
| Liability Coin | Tier | Max. Leverage | Liability Value in USDC | Maintenance Margin Rate |
| BTC | 1 | 10x | 0 - 1,000,000 | 2% |
| 2 | 8x | 1,000,000 - 2,000,000 | 3% | |
| 3 | 5x | 2,000,000 - 3,000,000 | 4% | |
| 4 | 3x | 3,000,000 - 4,000,000 | 5% | |
| USDC | 1 | 10x | 0 - 1,000,000 | 3% |
| 2 | 8x | 1,000,000 - 2,000,000 | 4% | |
| 3 | 5x | 2,000,000 - 3,000,000 | 5% | |
| 4 | 3x | 3,000,000 - 4,000,000 | 6% |
| Collateral Coin | Tier | Amount | Collateral Ratio |
| BTC, USDC | 1 | 0 - 1,000,000 | 1 |
| 2 | 1,000,000 - 2,000,000 | 0.975 | |
| 3 | 2,000,000 - 3,000,000 | 0.95 | |
| 4 | 3,000,000 - 4,000,000 | 0.9 | |
| 5 | 4,000,000 - 5,000,000 | 0.85 |
Basic Parameters for Further Calculations
| Borrow 10,000 USDC | Borrow 89,928 USDC (The Max. Borrowable Amount) | ||
| In USDC | ∑Asset | = 2 * 10,000 = 20,000 USDC | = 2 * 10,000 + 79,928 = 99,928 USDC (2 BTC and 79,928 USDC) |
| ∑Collateral Value | = 2 * 10,000 * 100% = 20,000 USDC | = 2 * 10,000 * 100% + 79,928 * 100% = 99,928 USDC | |
| Total Liability | = 10,000 USDC | = 10,000 + 79,928 = 89,928 USDC (1 BTC and 79,928 USDC) | |
| ∑Net Equity | = 20,000 - 10,000 = 10,000 USDC | = 99,928 - 89,928 = 10,000 USDC | |
| ∑Maintenance Margin | = 10,000 * 2% = 200 USDC | = 10,000 * 2% + 79,928 * 3% = 2,597.84 USDC |
Margin Level Calculation
| Borrow 10,000 USDC | Borrow 89,928 USDC (The Max. Borrowable Amount) | |
| Margin Level | = ∑Net Equity / ∑Maintenance Margin = 10,000 / 200 = 50 | = ∑Net Equity / ∑Maintenance Margin = 10,000 / (10,000 * 2% + 79,928 * 3%) = 3.849 |
| Margin Level Health Status | Margin Level > MCR The account is low risk | Margin Level > MCR The account is low risk |
Collateral Margin Level Calculation
| Borrow 10,000 USDC | Borrow 89,928 USDC (The Max. Borrowable Amount) | |
| Collateral Margin Level | = ∑Collateral Value / Total Liability = 20,000/10,000=2 | = ∑Collateral Value / Total Liability = 99,928 / (10,000 + 79,928) = 1.11 |
| Transfer Status | Collateral Margin Level = 2 The user is restricted from transferring funds out of the margin account. | Collateral Margin Level < 2 The user is restricted from transferring funds out of the margin account. |
| Max Transfer Out Amount | 0 | 0 |
| Convert to Cross Margin Classic (5X) | Yes Collateral Margin Level > 1.25 | No Since ∑Asset/∑Liability = 1.19 Collateral Margin Level < 1.25 |
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