BitMax.io Upgrade of Margin Trading Function and Adjustment of BTMX Max Leverage

Dear BitMax.io Users,

BitMax.io will upgrade the margin trading function with new rules at 2:00 a.m. EDT on May 7^th. As part of this upgrade, BTMX max leverage for margin trading will be adjusted down to 3X. The implementation details are as below.

1. Adjustment of BTMX max leverage to 3X

Post the upgrade, BTMX max leverage will be adjusted down to 3X.

Within 24 hours post the upgrade, forced liquidation will NOT be triggered and executed for any existing Margin Accounts with (Net Asset – Effective Initial Margin) < 0.

For the margin accounts with (Net Asset – Effective Initial Margin) >= 0, they will be subject to the new margin trading rules immediately with no exemption from forced liquidation.

After 24 hours (Starting from 2:00 a.m. EDT, May 8^th), the new margin trading rules will be implemented on all accounts with no exception.

So, for users with higher leverage ratio especially in BTMX, please consider reducing overall margin exposure within 24 hours post the upgrade to avoid unnecessary losses.

2. 10% haircut will be applied for BTMX under lock-up status when used as collateral for margin trading.

When BTMX lock-up request causes the Net Asset of Margin Account lower than Effective Minimum Margin, the system will reject the lock-up request.

3. Update of Maximum Leverage for the account

Maximum Leverage for the account will no longer be available for user selection. It will be systematically assigned based upon the user’s net asset per following schedule.

When Maximum Leverage for the account gets updated due to the change of Net Asset of Margin Account, it will only affect user’s max borrowable amount.  Maximum Leverage for the account is not factored in the calculation for forced liquidation. 

4. Update of Effective Initial Margin (EIM) for the account

In the Margin Trading Initial Margin (“IM”) will be first calculated separately for user’s Borrowed Asset, user’s Asset and overall user account. Then the highest value of all will be used for the Effective Initial Margin (EIM) for the account. IM is converted to USDT value based off the market price available.

EIM for the account= Maximum Value of (IM for all Borrowed Asset, IM for Total Asset, IM for the account)

IM for individual Borrowed Asset = (Borrowed Asset + Interest Owed)/ (Max Leverage for the Asset-1)

IM for all Borrowed Asset = Summation of (IM for individual Borrowed Asset)

IM for individual Asset = Asset / (Max Leverage for the Asset -1)

IM for Total Asset = Summation of all the (IM for individual Asset) * Loan Ratio

Loan Ratio = (Total Borrowed Asset + Total Interest Owed) / Total Asset

IM for the account = (Total Borrowed Asset + Total Interest Owed) / (Maximum Leverage for the account -1)

Note: Maximum Leverage for the account is systematically assigned based on the Net Asset of Margin Account

Example:

User’s position

  

   

Therefore, Effective Initial Margin for the account is calculated as follows.

Note: 

1. For the purpose of illustration, Interest Owed is set as 0 in the example above.
2. When current Net Asset of Margin Account is lower than EIM, users cannot borrow more funds.

When current Net Asset of Margin Account exceeds EIM, user can place new orders. However, the system will calculate the impact of new order on the Net Asset of Margin Account based upon the order price. If the newly placed order will cause the new Net Asset of Margin Account to drop below the new EIM, the new order will be rejected.

5. Update of Effective Minimum Margin (EMM) for the account

Minimum Margin (MM) will be first calculated respectively for user’s Borrowed Asset and Asset. The greater value of those two will be used for the Effective Minimum Margin for the account. MM is converted to USDT value based off the market price available.

EMM for the account = Maximum value of (MM for all Borrowed Asset, MM for Total Asset)

MM for individual Borrowed Asset = (Borrowed Asset + Interest Owed)/ (Max Leverage for the Asset*2 -1)

MM for all Borrowed Asset = Summation of (MM for individual Borrowed Asset)

MM for individual Asset = Asset / (Max Leverage for the Asset *2 -1)

MM for Total Asset = Summation of (MM for individual Asset) * Loan Ratio

Loan Ratio = (Total Borrowed Asset + Total Interest Owed) / Total Asset

Example:

User’s position

  

  

Therefore, Effective Minimum Margin for the account is calculated as follows.

  

Rules for Open Orders

Open order of margin trading will lead to the increase of Borrowed Asset even before the order execution. However, it will not affect the Net Asset.

Note:

1. For the purpose of illustration, Interest Owed is set as 0 in the example above.
2. Rules for Liquidation Process remain the same. When cushion rate reaches 100%, the user’s margin account will be subject to forced liquidation anytime.
3. Cushion rate = Net Asset of Margin Account / Effective Minimum Margin for the account

6. Calculation of Total Amount of Borrowed Asset and Asset

Under the Loan Summary section on the margin trading page, Balance and Loan Amount are displayed by asset.

Total Amount of Asset = Sum of Balance of all assets converted to the equivalent value of USDT based off the market price

Total Amount of Borrowed Asset = Sum of Loan Amount for all assets converted to the equivalent value of USDT based off the market price

 

Thanks for the continued support!
BitMax.io Team

 May 2nd, 2019