Tiered Maintenance Margin Rate

Introduction to Tiered Maintenance Margin

In order to prevent large positions from bursting from the impact on market liquidity, resulting in large losses, we use a tiered mechanism to reduce positions. Each tier corresponds to a different maintenance margin rate, when the system determines that the margin is not enough for the current position of the position of the maintenance margin, it will carry out the operation of reducing the number of positions to the next position in the tier.

This mechanism maintains the balance between systematic risk and market liquidity.

Small positions: Higher leverage and lower maintenance margin.
Large position: Lower leverage and higher maintenance margin.

Maintenance Margin Rate (MMR)

The margin rate is a measure of the risk of position-guaranteed assets, the maintenance margin is the minimum margin rate of a position, when the position margin rate reaches the maintenance margin rate, your position will be forced to be taken over by the system. We use the marked price to calculate margin rates to avoid forced closing due to non-liquidity or market manipulation.

Maintenance margin calculation

U-Margined perpetual futures: Maintenance margin = Mark price × Position size × Maintenance margin rate

Advantages of Tiered Maintenance Margin

Adapts to diverse trading strategies: Small position holders can trade with a higher leverage to magnify capital, while large position holders are subject to reasonable leverage caps to reduce risks.
Protects retail investors: Allow higher leverage (e.g., 100X) for small positions to accommodate risk tolerance, while the margin tiers prevent over-leverage across all position sizes.
Balances market dynamics: In extreme market conditions, limiting leverage for large positions and increasing their margin requirements reduces the impact of large liquidations on market liquidity. This mitigates price swings caused by the price volatility of oversized positions and maintains market stability.

Example of Tiered Maintenance Margin Levels

The required maintenance margin in futures trading is calculated using a tiered algorithm. Different Position Bracket tiers have corresponding MMR. The higher the position bracket, the higher the MMR. Factors such as position value, tiered MMR, and fees affect the final maintenance margin.

Different futures pairs have varying risk limit tiers, with corresponding maintenance margin rates that differ by position bracket. For detailed information, please refer to the official webpages: https://futures.voox.com/en_US/futuresData

Take BTC/USDT as an example, as shown in the following table:

Pair	Tier	Position Bracket (Notional Value in USDT)	Max Leverage	Tiered MMR
BTC/USDT	1	0-200,000	150x	0.30%
BTC/USDT	2	200,000-500,000	125x	0.40%
BTC/USDT	3	500,000-1,000,000	100x	0.50%
BTC/USDT	4	1,000,000-2,000,000	75x	0.65%
BTC/USDT	5	2,000,000-4,000,000	50x	1.00%
BTC/USDT	6	4,000,000-25,000,000	25x	1.00%
BTC/USDT	7	25,000,000-30,000,000	20x	2.50%
BTC/USDT	8	30,000,000-70,000,000	10x	5.00%
BTC/USDT	9	70,000,000-160,000,000	5x	10.00%
BTC/USDT	10	160,000,000-200,000,000	4x	12.50%
BTC/USDT	11	200,000,000-300,000,000	3x	15.00%
BTC/USDT	12	300,000,000-1,200,000,000	2x	25.00%
BTC/USDT	13	1,200,000,000-9,999,999,999	1x	50.00%

Example Calculation:

Assume a user opens a position worth 1,500,000 USDT. The required maintenance margin would be: 200,000 × 0.3% + (500,000 - 200,000) × 0.4% + (1,000,000 - 500,000) × 0.5% + (1,500,000 - 1,000,000) × 0.65% = 7,550 USDT

How to Manage Maintenance Margin

To avoid liquidation, you should regularly monitor the account margin and take the following actions:

Add Margin: Deposit additional funds if the margin is insufficient.
Reduce Position: Decrease position size to lower the margin requirement.
Use SL Orders: Set stop-loss (SL) conditions to limit potential losses.
Lower Leverage: Reduce leverage to increase the safety buffer.

Notes

Trade reasonably with leverage: High leverage amplifies risks. Align the leverage and position sizes with your risk tolerance.
Track positions regularly: Market fluctuations can shift your position into a higher tier, leading to stricter margin requirements and a margin call. Make sure to monitor your account and maintain sufficient margins to avoid forced liquidation.

Risk Disclaimer

Cryptocurrency prices are subject to high market risk and price volatility. You should only invest in products that you are familiar with and where you understand the associated risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material is for reference only and should not be construed as financial advice. Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up, and you may not get back the amount you invested. You are solely responsible for your investment decisions. VOOX is not responsible for any losses you may incur.

VOOX attaches great importance to compliance and has strictly abided by local regulations. Please obey local laws and regulations in your country or region. VOOX reserves the right in its sole discretion to amend, change, or cancel this announcement at any time and for any reason without prior notice.