Trading

Leverage

Margin means the collateral used to open and maintain a position, which is less than the total position size.

Leverage (or initial margin ratio) is the calculated using the initial margin value divided by nominal value of your position.

Derify protocol allows traders to use leverage up to 10x, which means you can buy derivatives representing face value that is 10 times of the deposited margin.

PnL

Profit and Loss (PnL) shows if you are actually making money.

When the actual price of the asset changes, nominal value of the derivative changes and so is the face value of your position.

Margin ratio

Margin ratio is the calculated using the remaining margin (after PnL) divided by nominal value of your position.

Margin value refers to the actual collateral used to back a position. The nominal value is the size of the position after leverage is considered, denominated in underlying asset. So a position with a margin of 100 USDT and 10x leverage will have a nominal value of 1000 USDT.

When the actual price of the asset changes, the nominal value changes and so is your margin ratio.

Liquidation and Automatic Reduction

The fluctuation of price may causes a negative PnL and thus a reduction of position nominal value.

When remaining margin level is lower than the Maintenance Margin Level (3%) but higher than Liquidation Margin Level (1%), system will automatically reduce the position until it's margin level is higher than the Maintenance Margin Level (3%).

Liquidation starts wheWhen remaining margin level is lower than the the Liquidation Margin Level (1%), system will automatically close the position, any remaining margin will be allocated to the insurance pool.n your margin ratio falls to 3% or below. This is known as the maintenance margin.

Here's an example: you can open an ETH long position worth 1000 USDT backed by a margin of 100 USDT. Your starting margin ratio is 10%, equivalent to a leverage of 10x. If ETH falls in value, you start to lose money, resulting in a negative PnL. PnL is added to your margin, so in our example, your margin will start to go below 100 USDC, in turn decreasing your margin ratio. If the margin ratio falls to 1%, then your position will be liquidated.

Cross Market Margin

We use cross-market margin mode, which means all your positions will share the same account fund pool, and calculated together.

Isolated market positions can be achieved through proper stop profit/loss management.

Holding position for position mining

The easiest way to join us is becoming a miner. We offer one-click opening of two-way position for risk-free position mining.

Two-way position means two completely hedged positions - same price, same amount, only different directions. Because of the cross-market trading mode, your margin account is will never be liquidated until you close your positions, while both positions will earn mining rewards for you!