Position Margin under Isolated Margin mode

In isolated margin mode, it depicts the margin placed into a position is isolated from the trader's account balance. In the event of liquidation, the trader will only lose all of his position margin (excluding funding fees). Hence, the position margin under isolated margin mode is:

FORMULA

Position Margin (Isolated Margin mode) = Initial Margin + Fee to Close

Replenishment of position margin under Isolated Margin mode

When a trader pays funding fee for a position, the funding fee will be deducted from the available balance at every funding timing. In the event where a trader has insufficient available balance, the funding fee will then be deducted from position margin and this will result in the position's liquidation price to move closer to the mark price and increase the risk of liquidation.

To avoid this from happening, traders can make deposits, perform asset exchange increases or release order margin from cancelling active orders to replenish their position margin or increase the available balance. However, do note that, under different contracts and different scenarios, the process of replenishment to position margin will be different too.

Additional Margin withdrawal formula in Isolated Margin mode

After opening a position and performing a margin adjustment, you can withdraw that additional capital provided that safety requirements are met. The ONUS system utilizes the following formula to calculate the maximum withdrawable amount from a position:

FORMULA
  • Max Withdrawal = max(0, Total Margin – max{Initial Margin – Unrealized PnL, Maintenance Margin})
  • Actual Withdrawal = min(Max Withdrawal, Additional Margin)

Note:

  • Initial Margin = Position Size * Mark Price / Leverage
  • Unrealized PnL = Position Size * (Mark Price – Entry Price)
  • Maintenance Margin = Position Size * Mark Price * Maintenance Margin Rate
  • Users cannot withdraw the Initial Margin while the position remains open.
  • If the position is in a significant loss, the system will automatically limit or reject withdrawal requests to preserve assets and prevent liquidation risk.
  • Regularly monitoring your unrealized PnL and liquidation price will help you take a more proactive approach to risk management.

Example: Assume Trader A has an open position on ONUS Futures with the following parameters:

  • Initial Margin: 500 USDT
  • Additional Margin: 200 USDT
  • Maintenance Margin: 50 USDT 

Trader A wants to withdraw Additional Margin. Below are three common scenarios reflecting the typical states of a position: in profit, at a slight loss, and at a significant loss.

Scenario 1: Position has an Unrealized Profit of 200 USDT

  • Max Withdrawal = max(0, 700 – max{500 – 200, 50}) = max(0, 700 – max{300, 50}) = max(0, 700 – 300) = 400 USDT
  • Actual Withdrawal = min(400, 200) = 200 USDT

Thus, Trader A can withdraw the entire 200 USDT of Additional Margin.

Scenario 2: Position has an Unrealized Loss of -150 USDT

  • Max Withdrawal = max(0, 700 – max{500 – (-150), 50}) = max(0, 700 – max{650, 50}) = max(0, 700 – 650) = max(0, 50) = 50 USDT
  • Actual Withdrawal = min(50, 200) = 50 USDT

Thus, Trader A can withdraw a maximum of 50 USDT from the additional margin.

Scenario 3: Position has an Unrealized Loss of -300 USDT

  • Max Withdrawal = max(0, 700 – max{500 – (-300), 50}) = max(0, 700 – max{800, 50}) = max(0, 700 – 800) = 0 USDT
  • Actual Withdrawal = min(0, 200) = 0 USDT

In this scenario, the position is nearing liquidation, and the system will not allow any margin withdrawal.

Safe Margin Management Tips

  • Regularly monitor your position status to ensure your margin level remains safe, especially during periods of high market volatility.
  • Proactively add margin when necessary to reduce your liquidation risk.
  • Limit withdrawing additional margin if your position is approaching its liquidation price or is currently experiencing significant losses.