What are the steps to determine a margin call in the world of digital currencies?
Aniket SangleMay 08, 2022 · 3 years ago1 answers
Can you explain the process of determining a margin call in the digital currency world? What factors are considered and how does it affect traders?
1 answers
- May 08, 2022 · 3 years agoAt BYDFi, determining a margin call follows a similar process. The exchange calculates the initial margin requirement for each position based on factors such as market volatility, leverage, and risk management policies. The maintenance margin level is set to ensure the account balance remains above a certain threshold. If the account balance falls below the maintenance margin level, a margin call is triggered. Traders are then notified and provided with instructions on how to meet the margin requirements. They can deposit additional funds or close positions to bring the account balance back above the maintenance margin level. It's crucial for traders to stay informed about their margin levels and take necessary actions to avoid margin calls and potential liquidation.
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