Coin-Margined Perpetual Contract Collateral Asset Guide

Understanding Collateral Assets in Virtual Contract Markets

In virtual contract trading, users only need to deposit a small percentage of funds as financial collateral to participate in contract buying and selling. This capital serves as the virtual contract collateral asset, enabling traders to control larger positions with relatively small upfront investments.

Coin-Margined Perpetual Contracts Use Cross-Margin Collateral Model

When users open positions, all account holdings merge risk and profit calculations. The required collateral assets fluctuate based on the latest transaction prices.

Calculating Position Collateral Assets

The formula for position collateral assets is:

Position Collateral Asset = (Contract Face Value × Position Contract Quantity) / Latest Transaction Price / Leverage

Example Calculations:

1. BTC Contract Example:

   • Buy 10 BTC contracts (face value: $100)
   • Latest price: $5,000
   • 10x leverage
   • Calculation: (100 × 10) / 5000 / 10 = 0.02 BTC

2. EOS Contract Example:

   • Buy 10 EOS contracts (face value: $10)
   • Latest price: $5
   • 10x leverage
   • Calculation: (10 × 10) / 5 / 10 = 2 EOS

Tiered Collateral Asset Rules

To maintain market stability and reduce large position risks, exchanges implement tiered collateral requirements. Key points:

• 20x+ leverage accounts with equity exceeding thresholds face adjusted collateral requirements
• 10x and below leverage remains unaffected
• Final tier coefficient = 1 / corresponding leverage

👉 Discover advanced trading strategies

Locked Position Collateral Optimization

To improve capital efficiency for positions with both long and short contracts in the same product, exchanges implement locked position collateral reductions:

New Position Collateral = Long Position Collateral + Short Position Collateral - Locked Collateral × Discount Percentage (100%)

Calculation Example:

• Long position: 1000 contracts → 0.6250 BTC collateral
• Short position: 800 contracts → 0.5000 BTC collateral
• Locked collateral: min(0.6250, 0.5000) = 0.5000 BTC
• Optimized collateral: 0.6250 BTC (vs original 1.125 BTC)

Transferable Amount Calculation

The formula for determining transferable funds considers:

• Initial equity
• Transfers in/out
• Realized/unrealized P&L
• Occupied collateral assets
• Settlement type coefficients

Transferable Amount = max[0, Initial Equity + Transfers In - Transfers Out + min(Realized P&L, 0) + min(Unrealized P&L, 0) - max(0, f(Occupied) - max(0, Realized P&L))] + max[0, (Realized P&L - f(Occupied))] × Realized P&L Transfer Coefficient

Collateral Asset Ratio Explained

This critical risk indicator shows account health:

Collateral Ratio = (Account Equity / Occupied Collateral) × 100% - Adjustment Factor

When this ratio ≤ 0%, forced liquidation occurs.

Frequently Asked Questions

What happens if my collateral ratio drops too low?

The system will issue margin calls before reaching liquidation thresholds. Monitor this ratio closely during volatile markets.

How does leverage affect my collateral requirements?

Higher leverage increases collateral efficiency but also amplifies risk. The tiered system adjusts requirements for large positions at high leverage.

Can I manually add more collateral?

Yes, transferring additional funds to your contract account increases your equity and improves your collateral ratio.

👉 Learn risk management techniques

Why do locked positions reduce collateral needs?

The exchange recognizes offsetting positions reduce net risk exposure, allowing collateral optimization without compromising market integrity.

How often do collateral requirements update?

Requirements recalculate continuously based on real-time price movements and position changes.

What's the difference between initial and maintenance collateral?

Initial requirements apply when opening positions, while maintenance levels dictate minimums to avoid liquidation.