3EX exchange determines users' margin rate lines and automatic position reduction mechanisms based on different trading modes and risk levels to protect users' funds and maintain stable platform operations. Users need to understand the liquidation rules, set reasonable stop-loss and take-profit lines, and properly control trading risks.
1.What is the margin rate and how is it calculated?
Margin rate is a key indicator used to judge account risk. The higher the margin rate, the lower the account risk. The 3EX exchange mainly provides USDT-based perpetual contracts, and its margin rate calculation formula is:
Cross margin rate = (wallet balance + total unrealized profit and loss + frozen margin) / (total position maintenance margin + total position liquidation fees)
Isolated margin rate = (position margin + unrealized profit and loss) / (isolated maintenance margin + liquidation fee)
Maintenance Margin = face value * |number of contracts| * mark price * maintenance margin rate
Position Value = face value * |number of contracts| * mark price
Note:
- Liquidation fees are calculated based on the highest taker fee rate;
- Liquidation fees for forced liquidation are the same as for regular position closing operations, charged based on the position value * taker fee rate at the time of liquidation.
- The estimated liquidation price displayed when a user holds a position is for reference only.
Reference: Tiered Maintenance Margin Rate
2.What is forced liquidation?
When a user's margin rate falls to a certain level, the exchange will trigger position reduction or forced liquidation mechanisms to control risk.
Forced liquidation is the action of liquidating a user's entire position. Specifically, in cross margin mode, if the margin rate <= 100%, forced position reduction or forced liquidation will be triggered. In isolated margin mode, if the margin rate <= 100%, forced position reduction or forced liquidation will also be triggered.
To avoid long-short stampede and market manipulation, 3EX uses the mark price for forced liquidation. Leverage and positions are measured based on the user's total position risk in a certain margin currency.
Forced liquidation prevention measures:
- Add more margin:
Add 10-100% funds to your trading account. As the margin increases, the forced liquidation price changes. The higher the margin, the lower the risk of forced liquidation.
- Lower actual leverage:
Lower the leverage multiplier, increase the required margin for holding positions, and detect enough balance added to the account by the exchange, then the position leverage multiplier can be successfully adjusted.
- Close positions in advance:
When the position is about to enter a risk state, close the position at market price in advance, execute the trade quickly, and avoid the risk of forced liquidation.
Partial position closing: Partial position closing for long positions can lower the estimated forced liquidation price, while partial position closing for short positions can increase the estimated forced liquidation price, making the remaining positions safer.
3EX related links:
English：
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