Margin Management

Margin Calculations

The Market Maker Bot features sophisticated margin calculations that account for directional bias and updated exposure tolerances.

Base Margin Requirements

Spot Markets:

• Exposure Tolerance: 8% (increased from 6%)

• Formula: baseMargin = notional × 0.08

• Rationale: Higher tolerance accounts for spot market volatility and margin requirements

Perpetual Markets:

• Formula: baseMargin = (notional ÷ leverage) × safetyBuffer

• Safety Buffers by Mode:

  • Aggressive: 2.0x safety buffer for higher risk tolerance

  • Normal: 1.0x safety buffer for balanced risk management

  • Passive: 0.5x safety buffer for conservative trading

Directional Bias Adjustments

• Additional Margin: Up to 20% more margin for extreme bias

• Formula: adjustedMargin = baseMargin × (1 + |directionalBias| × 0.2)

• Examples:

  • Neutral (0): No additional margin

  • Moderate Bias (±0.5): 10% additional margin

  • Extreme Bias (±1.0): 20% additional margin

Risk Monitoring

• Critical Warning: Triggered when available margin < 10% of recommended margin

• Color-coded Indicators:

  • Green: Safe (recommended < available)

  • Orange: Caution (recommended ≤ 5× available)

  • Red: Insufficient (recommended > 5× available)

Real-time Updates

Margin requirements automatically recalculate when you change:

• Notional amount

• Trading pair

• Trading mode

• Directional bias setting

• Account selection

Best Practices

• Conservative Approach: Use moderate directional bias (±0.3 to ±0.5) to minimize additional margin requirements

• Adequate Funding: Maintain available margin at least 20% above recommended margin

• Mode Selection: Choose trading modes based on your risk tolerance and available capital

• Regular Monitoring: Check margin requirements when market conditions or account balances change