In order to minimize the problem of some users having negative balance when closing orders and to ensure the sustainability of the ONUS Pro platform, the team will adjust the maintenance margin rate (MMR) from 0.04% to 0.1%.
Application time: From 09:00 AM UTC on June 29th, 2023
Note: At the time of MMR adjustment, some open positions with a risk ratio of > 85% may be affected. Users should consider closing positions or adding margins to limit risk.
1. What is maintenance margin rate (MMR)?
- MMR stands for Maintenance Margin Rate
- The maintenance margin is a small percentage, equivalent to 0.1% of the position value. If the position margin falls to or below the maintenance margin, the order will be liquidated.
- Formula: Maintenance margin = Position Value * 0.1%.
- Note: Maintenance margin will increase or decrease depending on the trader adjusting the position value. Traders can add margin to widen the gap to the liquidation price.
2. MMR increased to 0.1%, what should traders pay attention to?
The adjustment of the MMR will affect the Trader’s position:
- Increase maintenance margin requirements for positions
- Impact on how the liquidation price is calculated
2.1. Increase maintenance margin requirements
Assume you open a position with a value of 10,000,000 VNDC.
Before: MMR = 0.04% | New adjustments: MMR = 0.1% | |
Maintenance margin | Maintenance margin = 10,000,000 * 0.04% = 4,000 VNDC | Maintenance Margin = 10,000,000 * 0.1% = 10,000 VNDC |
Description | Position’s Current Margin = Initial Margin + Unrealized Profit/Loss | Position’s Current Margin = Initial Margin + Unrealized Profit/Loss |
As the comparison table above demonstrates, the increase in MMR from 0.04% to 0.1% implies higher maintenance margin requirements and the possibility of sooner liquidation. When comparing ONUS Pro to other exchanges (such as Binance 0.4%, Bybit 0.5%,…), 0.1% is still a very favorable ratio.
2.2. Notes on Liquidation
Formula for calculating liquidation price:
- Long Position: Liquidation Price = Entry Price * (100% – IMR + MMR) – Extra margin added / Contract size
- Short Position: Liquidation Price = Entry Price * (100% + IMR – MMR) + Extra margin added / Contract size
The MMR is an ingredient in the Liquidation Price formula. Since the adjusted MMR is up from 0.04% to 0.1%, the calculation of the liquidation price is also affected and the liquidation will occur sooner.
2.3. Example of leverage and corresponding liquidated PnL
With an MMR of 0.1%, the position will be liquidated with the following leverage and PnL, respectively:
Leverage | Liquidated PnL |
x5 | -99.5% |
x10 | -99% |
x20 | -98% |
x50 | -95% |
x75 | -92.5% |
x100 | -90% |
x125 | -87.5% |
(*) The position is liquidated when the above negative PnL is recorded. For example, if Trader opens a position using x20 leverage, the position will be liquidated when PnL is -98%.
Note: The liquidation is triggered by the Mark Price; Unrealized Profit/Loss is calculated according to the Best Price. If the Mark Price differs significantly from the Best Price, the liquidation can be triggered earlier than in the example table above.
