Order margin refers to the portion of asset being frozen when a trader places an order to open a new position. Rules to calculate the order margin required are as follows:
- Order Margin for A Buy Order = Order Price * Order Size * Order Margin Rate
- Order Margin for A Sell Order = Max (Order Price, Bid 1 Price) * Order Size * Order Margin Rate
- Order Margin Rate = 1 / Leverage
- Order margin is not required if your order will reduce your existing position.
Binance JEX uses the fair mark price mechanism to minimize the occurrence of liquidations. This means an additional amount of margin, known as premium compensation, may be frozen. Rules to calculate it are as follows:
- When the order price of a buy order is higher than the fair mark price, or when the order price of a sell order is lower than the fair mark price, freezing of premium compensation will be required.
- Premium Compensation = (Order Price - Fair Mark Price) * Order Size
- An example: If the current fair mark price of BTC is 1,000 USDT, and a trader opens a 10 BTC position at the price of 1,010 USDT, then the equation to calculate the order margin required is: Order Margin = 1,010 USDT * 10 BTC * Order Margin Rate + (1,010 USDT - 1,000 USDT) * 10 BTC
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