Margin and initial margin
In futures trading, margin refers to the portion of funds deposited by the user as collateral to ensure contract fulfillment. Through the margin mechanism, users can trade without paying the full contract value, thereby improving capital efficiency. Initial margin is the minimum amount of margin required to open a position. It is determined by the selected leverage—for the same position size, a higher leverage results in a lower initial margin requirement.
In isolated margin mode, each position's margin is independent. In cross margin mode, all funds in the user's futures account are treated as shared margin. Users can manually add or remove margin for individual positions or for the entire account, but the margin must not fall below the required initial margin.
Initial margin calculation
In cross margin mode, the initial margin for a position fluctuates with market price movements.
For USDT-M contracts: Initial Margin = Position Value / Leverage + Position Value × Exit Fee Rate Position Value = Contract Amount × Contract Multiplier × Mark Price For coin-M contracts: Initial Margin = Position Value / Leverage + Position Value × Exit Fee Rate Position Value = Contract Amount / Mark Price
In isolated margin mode, the initial margin for a position is fixed and does not change with market prices.
For USDT-M contracts: Initial Margin = Entry Position Value / Leverage + Entry Position Value × Exit Fee Rate Entry Position Value = Contract Amount × Contract Multiplier × Average Entry Price For coin-M contracts: Initial Margin = Entry Position Value / Leverage + Entry Position Value × Exit Fee Rate Entry Position Value = Contract Amount / Average Entry Price The exit fee rate is 0.075%.
Example
Suppose a user opens a long position of 100 BTCUSDT perpetual contracts at 50x leverage, with a contract multiplier of 0.01, and the mark price at entry is 100,000 USDT. Entry Position Value = 100 × 0.01 × 100,000 = 100,000 USDT
Initial Margin = 100,000 / 50 + 100,000 × 0.075% = 2,075 USDT
FAQ
- How do I know how much initial margin I need? The system automatically calculates and displays the required initial margin when placing an order. You can also use Gate's Futures Calculator to make this calculation.
- What's the difference between initial margin and position margin? Initial margin: The minimum margin required to open a position, ensuring sufficient funds for entry. Position margin: The amount of margin maintained while holding a position, which fluctuates with market price movements.
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