Leverage and Margin in Coin-Margined Futures Contracts

Binance uses a sophisticated risk control system and liquidation model to support high- leverage trading by adopting the Maintenance Margin model. For the latest updates, please refer to the Leverage & Margin page.

All leverage and margin tiers of Coin-Margined Futures Contracts can be accessed via the Leverage & Margin page.

Initial Margin Rate

The maximum amount of leverage available to users depends on the notional value of their position. Generally, the larger the position, the lower the leverage allowed. Therefore, Initial Margin deposits are calculated using the leverage selected by the user.

Please note:

• In Cross Margin Mode, margin can only be shared with the same type of asset. For example, all BTC in the COIN-M Futures Wallet can be used for all BTC-based contracts (including perpetual and delivery) within Cross Margin Mode.
• Initial Margin Rate = 1 / Leverage
• Before opening a position, the user must first select a leverage level and meet the Initial Margin requirement. If no leverage is selected manually, the system will be set at 20x by default. The higher the leverage, the smaller the notional size the user will have access to. The lower the leverage, the higher the notional size the user can open. The system will display the maximum allowable position size at different tiers of leverage as shown below.

Maintenance Margin Rate

Maintenance Margin calculations are done via a “Tax Bracket” setup. This means that the Maintenance Margin is always calculated the same way, regardless of the leverage chosen. Moving from one bracket to another will not cause the earlier bracket to change its leverage. To avoid auto-liquidation,, it is highly recommended users liquidate positions before the collateral falls below the Maintenance Margin.

Cost Required to Open a Position

Users must ensure that they have the sufficient funds before opening a position. The total cost required to open a position includes the initial margin and open loss (if any).

Open loss occurs when the order price is unfavorable to the traders, for example, Mark Price is lower than the order price for a long order. To prevent immediate liquidation, Binance includes open loss as part of the cost required to open a position when the traders place the order. If open loss is not counted, there is a high probability that users’ position will get liquidated immediately once they have placed such orders.

Cost = Initial Margin + Open Loss (if any)

Step 1: Calculate initial margin

Initial Margin

= Notional Value / Leverage Level

= [ (10*100 USD) / 9,800 USD ] / 20

= 0.0051 BTC

Step 2: Calculate open loss

Open Loss = Number of Contract x Contract Multiplier x Absolute Value {min[0, direction of order x (1 / order price - 1 /mark price)]}

*direction of order: 1 for long order；-1 for short order

Open loss of long order

= 10 x 100 USD x Absolute Value {min[0, 1 x (1 / 9,800 USD - 1 / 9,602.6 USD)]}

= 0.002097646 BTC

Open loss of short order

= 10 x 100 USD x Absolute Value {min[0, 1 x (1 / 9,800 USD - 1 / 9,602.6 USD)]}

= 0

Step 3: Calculate the cost required to open a position

Since the long order includes an open loss, the cost required to open a long position is higher, as it accounts for both the initial margin and the open loss.

Cost required to open a long position

= 0.0051 BTC + 0.002096562 BTC

= 0.0072 BTC (difference due to rounding)

The short order has no open loss, so the cost required to open a short position is equivalent to the initial margin.

Cost required to open a short position

= 0.0051 BTC + 0 = 0.0051 BTC

Frequently Asked Questions

Why did my leverage adjustment fail?

Adjusting leverage requires the completion of your identity verification (KYC) process. Please note that even after completing the KYC, it may take up to 48 hours to synchronize your data at the system level, or the KYC application has not been approved.