Perpetual Futures Margin and Position Mode Description

This chapter introduces the margin mechanism and position modes in TBBIT Futures trading, including the differences between Cross and Isolated modes, leverage adjustment logic, and risk control concepts. Understanding this content helps users manage position risks more effectively.

I. Cross Margin Mode

Cross Margin Mode means that all available balance in the user's account will be used as margin to support all current positions. In this mode, all positions share the margin in the account. When a certain position incurs a loss, the system automatically utilizes other available balances in the account to maintain the position.

• Features: All positions share margin; stronger resistance to short-term fluctuations; less likely to be liquidated by single price spikes.

• Risk Characteristics: Losses in a single position may affect the entire account; in extreme market conditions, it may lead to total loss of account funds.

• Use Cases: Hedging strategies; multi-position portfolio trading; users with higher risk tolerance.

II. Isolated Margin Mode

Isolated Margin Mode means the margin for each position is calculated independently and does not affect others. Users allocate a fixed margin to a specific position. When the loss of that position reaches a certain level, only that position is liquidated, without affecting other positions in the account.

• Features: Risk isolation for each position; maximum loss limited to the margin of that specific position; stronger risk controllability.

• Risk Characteristics: Weaker resistance to fluctuations; easier to trigger forced liquidation.

• Use Cases: Directional trading; short-term or high-frequency trading; needs for refined risk control.

Comparison: Cross vs. Isolated Margin Mode

III. Leverage Adjustment Mechanism

In TBBIT Futures trading, users can adjust leverage multiples according to their trading needs. Adjusting the leverage multiple directly affects the required margin and risk level of a position.

• Adjustment Logic: Increasing leverage reduces required margin but increases risk; decreasing leverage increases required margin but reduces risk.

• Notes: In some cases, adjusting leverage may require adding or releasing margin; adjusting leverage while holding a position may affect the liquidation price; maximum leverage limits may apply to different products.

IV. Initial Margin and Maintenance Margin

1. Initial Margin: The minimum funds required for a user to open a position. Calculation:

   $$\text{Initial Margin} = \text{Notional Value} \div \text{Leverage Multiple}$$

   . It determines the maximum size of the position a user can open.

2. Maintenance Margin: The minimum margin level that a user must maintain during the holding period. When account equity falls below the maintenance margin, the system triggers forced liquidation.

Comparison: Initial vs. Maintenance Margin

V. Margin Call

A Margin Call is a risk warning issued by the system to the user when the account risk level rises close to the forced liquidation threshold.

• Common Triggers: Market price moves unfavorably; account equity approaches the maintenance margin level.

• User Actions: Add margin; reduce position size (partial closing); adjust leverage multiple.

• Significance: Provides early risk warning; creates a time window for position adjustment; reduces the probability of liquidation.

VI. Summary

In TBBIT Futures trading, the margin mechanism and position modes constitute the risk management system. Users should reasonably choose position modes and leverage levels based on their trading strategies and risk preferences, and continuously monitor their account risk status.