Margin Position and Minimum Required Margin

As mentioned earlier, in order for a user to take a position, collateral must be provided. The required collateral value, also known as the margin position, can range from over 100% to 20% of the notional value, which is equivalent to taking a position with leverage of 1x to 5x. The margin position can be determined using the following formula:

$$\begin{equation*} \text{margin position} = \frac{\text{collateral}+\text{profit \& loss}-\text{trading fee}-\text{interest due}}{\text{contract size}\times\text{current price}} \times 100\%. \end{equation*}$$

The user is enabled by the protocol to enter a position while limiting the portion of their collateral and the overall trading size. This portion, which corresponds to the calculated margin position, must be equal to or greater than 20% at the initial stage and is referred to as the minimum margin. The collateral used for the position that corresponds to the minimum margin is known as the minimum collateral. Although recent efforts have been made, the position margin fluctuates constantly during the opening position.