How to calculate Bitcoin leverage margin call

In Bitcoin leverage trading, the calculation formula of margin call is: margin call = loss amount - available margin. The steps include: Calculate the loss amount: subtract the current market price from the entry price; Calculate the available margin: Subtract the profit and loss from the original margin; Judge the margin call: When the loss amount is greater than the available margin, margin call = Loss amount - Available margin Security deposit.

Calculation of Bitcoin leverage margin call

In Bitcoin leverage trading, margin call refers to the trader’s margin When the balance is insufficient to cover the loss exposure, the exchange requires additional margin. The calculation formula is as follows:

Margin call = loss amount - available margin

Detailed explanation of the steps:

1. Calculate the loss amount:
   Subtract the current market price from the entry price to get the loss amount per unit contract. Multiply by the contract size to get the total loss amount.
2. Calculate the available margin:
   Subtract the profit and loss from the original margin. Available margin is the balance of funds used to protect against losses.
3. Judgment of margin call:
   If the loss amount is greater than the available margin, a margin call is required. The calculation formula is: margin call = loss amount - available margin.

Example:

Suppose you trade a $10 Bitcoin contract using 5x leverage. If the current market price drops to $9, then:

• Loss amount = ($10 - $9) * 10 contracts = $10
• Available margin = $500 ($10* 50x leverage)
• Margin call = $10 - $500 = -$490

In this case, you lose $10, but the available margin is not enough to cover the loss . Therefore, you need to add an additional $490.

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