The Single-Currency Margin mode in Unified Account allows users to trade USDT-M Perpetual futures, options, and spot (margin borrowing is not supported) using USDT as margin. This describes the name of “Single-Currency Margin”. While for the “Multi-Currency Margin” mode, multiple assets can serve as margin. Meanwhile, the cross and isolated modes, one-way and hedging modes of futures trading are also supported in the Single-Currency Margin mode.
Compared with the Multi-Currency Margin mode, Single-Currency Margin mode better separate funds and risks, which makes risks more manageable and is more friendly to retail investors. When liquidation occurs in your futures isolated or cross positions, those non-USDT spot assets will not be affected.
Single-Currency Margin mode offers the following fund separation solutions: A risk unit is a unit in which risk control measures and liquidation are independently performed.
1. Derivative Cross Positions
Derivative cross positions are deemed one risk unit comprising multiple futures and options positions. In the Single-Currency Margin mode, there’s only one risk unit for derivative cross positions.
The USDT balance in Unified Account serves as margin for derivative cross positions. When a user opens a futures isolated position, or places a buy order in USDT markets in spot trading, the user is consuming the margin for the derivative cross position unit.
Margin rules for the risk unit of derivative cross positions: Unit Margin Balance = USDT balance in Unified Account - USDT occupied by futures isolated positions - USDT frozen in spot open orders + sum (unrealized PNL of all futures cross positions) Unit Initial Margin = sum (initial margin required for futures positions and open orders in the cross mode) + sum (initial margin required for all options short positions and open orders) Unit Maintenance Margin = sum (maintenance margin required for futures positions in the cross mode) + sum (maintenance margin required for all options short positions) Notes: The initial and maintenance margin requirements for futures positions and open orders are the same as those of the classic futures account and those in the Multi-Currency Margin mode. The initial and maintenance margin requirements for options short positions and sell orders are the same as those of the classic options account and those in the Multi-Currency Margin mode. For reference: Multi-Currency Margin Mode - About Margin and Terminology As no borrowing is involved in the Single-Currency Margin mode, the margin requirements for options buy orders are the same as that of classic options account, but slightly different from that in the Multi-Currency Margin mode. The initial margin required for options buy orders = Premium + Trading fee Unit Initial Margin Ratio = Unit Margin Balance / Unit Initial Margin Unit Maintenance Margin Ratio = Unit Margin Balance / Unit Maintenance Margin Unit Available Margin = Unit Margin Balance - Unit Initial Margin
In addition, Transferable USDT in Unified Account = Transferable USDT in the risk unit of derivative cross positions = min (USDT balance in Unified Account - USDT occupied by all futures isolated positions - USDT frozen in spot open orders - USDT frozen in options buy orders, Unit available margin in derivative cross positions)
The amount of USDT used for opening futures isolated positions and placing spot buy orders needs to be no greater than the transferable USDT in the risk unit of derivative cross positions.
Risk control rules for the risk unit of derivative cross positions:
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When the initial margin ratio of this risk unit is < 100%, Auto-Cancel will be triggered within the risk unit. Other risk units (such as risk units of futures isolated positions) will not be affected. Auto-Cancel will cancel options open orders first and then futures open orders. The system won’t stop canceling until the initial margin ratio of the risk unit goes above 100%. It’s worth noting that when the initial margin ratio is below 100%, you can only place orders to close positions instead of increasing positions.
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When the maintenance margin ratio of the risk unit is <= 100%, liquidation will be triggered within the risk unit. Other risk units will not be affected. The system will simultaneously liquidate the futures and options positions. The liquidation process is subject to a partial liquidation mechanism, the same as that in the Multi-Currency mode. If bankruptcy occurs after liquidation ends, insurance funds will be used to cover the losses. For reference: Multi-Currency Margin Mode - Risk Control Mechanism
2. Futures Isolated Position
A futures isolated position is deemed an independent risk unit. After a user opens a new futures isolated position or increase position for existing isolated positions, the initial margin required will be transferred out of the risk unit of derivative cross positions. If this futures isolated position is liquidated, only margin of this risk unit will be affected and other risk units will not be affected. In the Single-Currency Margin mode, a user can have multiple risk units for futures isolated positions.
Margin rules for the risk unit of a futures isolated position: Margin Balance = USDT occupied by the isolated position + Unrealized PnL of the isolated position Initial Margin = Position initial margin + Initial margin required for open orders (The specific calculation rules of initial margin is the same as that of the classic futures account and in the Multi-Currency margin mode). Maintenance Margin = Position maintenance margin (The specific calculation rules of maintenance margin is the same as that of the classic futures account and in the Multi-Currency margin mode). Margin Ratio = Margin Balance / Maintenance Margin
The risk control rules for the risk unit of a futures isolated position are the same as that of the classic futures account. When the margin ratio is <=100%, liquidation will be triggered within the risk unit. Other risk units will not be affected. First of all, the system will firstly cancel all open orders in the risk unit, and perform a tiered liquidation. In this tiered liquidation process, first, the number of contracts that needs to be liquidated if the risk limit of the position is to be lowered to the next tier will be calculated. Second, orders to close positions with the same amount of the number of contracts calculated before will be placed at the bankruptcy price in the secondary market. If the liquidity in the order book is insufficient, the unfilled portion will be taken over at the bankruptcy price using the insurance fund. If the insurance fund cannot take over the portion, ADL will be performed. After these positions are fully closed, the system will lower the risk limit tier and thus the maintenance margin requirement for this position will be lowered as well. Then the system will check whether the margin ratio is backed to 100% or above. The tiered liquidation will not stop until the margin ratio is backed to 100% or above.
3. Spot Trading
Except for the USDT balance, other spot assets will not be involved in the risk unit of derivative cross positions. Therefore, they will not be affected by derivatives trading. Users can still use these spot assets for regular spot trading. When sell orders are placed and filled in USDT spot markets, the USDT transferred in will be counted as the margin used for the risk unit of derivative cross positions. When buy orders are placed in USDT spot markets, the USDT frozen in open orders and used in filled buy orders are deemed assets transferring out of the risk unit of derivative cross positions.
Reminder: Please update your App to the 6.43.0 version for a better experience of the Single-Currency Margin mode in Unified Account.
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