Does BitMax.io Futures offer leverage?
How much leverage does BitMax.io Futures offer?
BitMax.io Futures offers users up to 100X leverage. Quick options available to users are: 1X, 3X, 5X, 10X, 20X, 50X, and 100X.
What is the calculation for Account Margin Rate?
Collateral / Position
What is the calculation to determine an Account’s leverage?
1 / (Account Margin Rate)
What assets can be used as collateral?
Users can deposit USDT, USDC, PAX, BTC, and ETH to be used as collateral.
Is there a collateral discount factor if I use non-stablecoin assets as collateral?
Yes. While USDT, USDC, and PAX have a 1:1 ratio, BTC and ETH are discounted when used as collateral. The below table displays the collateral discount factor for all accepted assets.
For example, if a user deposited 1 BTC priced at $10,000 per BTC to be used as collateral, the BTC would represent $9,800 worth of collateral that could be contributed to the user’s initial margin rate, or maintenance margin rate.
What is Liquidity?
Liquidity is the appetite and willingness of patient, prospective buyers to purchase an asset, and the appetite willingness of patient, prospective sellers to sell an asset. Liquid markets provide traders the ability to trade large size quickly, with minimal transaction costs, when they deem it prudent to do so; conversely, illiquid markets make it difficult to build significant exposure to an asset or exit a large position in an efficient manner.
Liquidity is the object of a bilateral search in which buyers look for sellers, and sellers look for buyers. When a buyer finds a seller who will trade at mutually acceptable terms, the buyer has found liquidity and a trade is facilitated. Likewise, when a seller finds a buyer who will trade at mutually acceptable terms, the seller has found liquidity and a trade is facilitated.
What is a maker order?
A maker order is defined as an order from a market participant to buy or sell an asset that provides liquidity to the order book.
What is a taker order?
A taker order is defined as an order from a market participant to buy or sell an asset that removes liquidity from the order book.
What is market depth?
Depth is a dimension of liquidity that refers to the size of a trade that can be arranged at a given cost. If there is insufficient depth to satisfy a trade at a given cost, the bilateral search between buyers and sellers continues until the entire trade is completed. Assuming the order needs to be executed immediately, the trade will move the market. In illiquid markets, buyers that demand immediacy will move the market and consequently appreciate the price, while sellers that demand immediacy will move the market and consequently depreciate the price.
What is TWAP?
TWAP is the time weighted average price. TWAP is generally used as a reference using a specific time window. For example, TWAP from the previous one hour.
What is the Best Bid and the Best Offer?
The best bid is the highest priced buy order (or group of buy orders) to provide liquidity that rests on an order book.
The best offer is the lowest priced sell order (or group of sell orders) to provide liquidity that rests on an order book.
What is market midpoint?
Market midpoint is the midpoint between the best bid and the best ask. Market midpoint can be calculated as:
((Best Ask - Best Bid) / 2)) + (Best Bid)
What is market impact?
If a market is illiquid, impatient buyers and sellers (takers) will induce market impact or “move the market” when they choose to trade. An impatient buyer seeking to trade a large quantity of tokens in an illiquid market will have portions of their order filled at a premium to the spot price. An impatient seller seeking to trade a large quantity of tokens in an illiquid market will have portions of their order filled at a discount to the spot price. The consequence of both the buyer and the seller is market impact.
We can determine the average fill price of any trade by calculating the volume weighted average of all trade prices in the interaction between the impatient trader and the liquidity their order executes against. The premiums and discounts that large buyers and sellers respectively pay are called price concessions.
What is an order book?
When a maker order is placed by a buyer or seller, the order is categorized in a file called an order book with other standing orders. Order books hold all open orders that have not yet been filled. Order books organize liquidity and therefore reveal the conditions under which patient traders will trade.
Are losses from users’ liquidations socialized if their account balances are insufficient to cover?
Clawbacks are only exercised if a contract’s Insurance Fund has insufficient balance to cover losses incurred by distressed accounts with negative Account Value. Note that the Insurance Fund will only pay out if distressed positions are passed to Backstop Liquidity Providers (“BLPs”) or other user accounts via the auto-deleveraging process at a price less favorable than the Mark Price (i.e., long positions priced at a premium to the Mark Price or short positions priced at a discount to the Mark Price).
Clawbacks will only draw from accounts with positive unrealized PnL and are exercised proportionally.
Clawback ratio is calculated as:
Clawback Ratio = MIN (1, ABS (deficit in Insurance Fund / Total positive Unrealized PnL))
What is auto-deleveraging?
Auto-deleveraging exists in order to pass on the liabilities of the most distressed accounts to accounts that hold the largest opposing positions, subsequently closing out the positions, or portions of the positions, held by these accounts. The process only occurs if the capacity of Backstop Liquidity Providers (“BLPs”) is insufficient to take on the positions of distressed accounts that have been taken over by BitMax.io Futures.