Business Rules for Cross Margin Trading
- Margin Trading Guide
1.1 The Rule are formulated in accordance with the principles of fairness, openness and impartiality in order to regulate the leveraged trading and loan of digital assets, maintain the market order and protect the legitimate rights and interests of investors.
1.2 The Rule are additional to the Leveraged Trading Service Agreement.
1.3 The Rule shall apply to the cross leveraged loans and cross leveraged trading on this Website. Where there is no provision in the Rule, the Leveraged Trading Service Agreement, User Agreement and other relevant provisions of this Website shall apply.
2.1 The User shall provide margin for cross leveraged trading, which is equal to the net assets in his/her cross leveraged account multiplied by the corresponding margin adjustment coefficient.
2.2 The margin adjustment coefficient refers to the coefficient for the conversion of the margin of a token type at its market price when calculating the margin amount.
2.3 The range of margin token types shall be subject to announcements of the Platform, and the adjustment coefficient for the margin of a single token type shall be subject to announcements.
2.4 To ensure the security of assets, the Platform has the right to adjust the margin adjustment coefficient and the token type of the margin, subject to the announcements issued by the Platform from time to time.
2.5 To control risks, the Platform has the right to set a limit for the margin of a token type, that is, assets in excess of the limit for the token type shall not be included in the loanable amount.
3. Loan Rules
3.1 The maximum amount of a leveraged loan is the maximum amount of tokens that the User can borrow for the current leveraged trading. The Platform will calculate the current maximum amount of a leveraged loan for the User based on the maximum amount that the User can borrow for cross leverage, the adjustment coefficient for loans of certain token type, risk control rules of the Platform, and other restrictions.
For purposes of these Rules, maximum amount of a leveraged loan = [net assets in the cross leveraged account equivalent *(maximum leverage multiple -1) - borrowed assets outstanding]/ adjustment coefficient for loans of certain token type
Wherein, net assets in the cross leveraged account equivalent = min(net assets in the cross leveraged account, margin limit) * margin adjustment coefficient
3.2 The adjustment coefficient for digital assets loans is the coefficient for the conversion of digital assets loans in a token type at its market price when calculating the used margin.
3.3 In order to ensure the security of assets, the Platform has the right to adjust the adjustment coefficient for digital assets loans and the type of tokens that can be borrowed, subject to the announcements issued by the Platform from time to time.
3.4 After borrowing leveraged loan, the borrowed digital assets will be transferred to the User’s cross leveraged account immediately, and the platform system will start charging immediately. The User can use the borrowed digital assets for leveraged trading in paired trading allowed by the cross leveraged trading.
4. Leverage Multiple
The amount of digital assets loans that the User can apply for depends on the principal in the account and the leverage multiple of the Platform. For example, if the Platform sets the leverage multiple for cross leverage as 5, the User can theoretically borrow digital assets that are 4 times the principal. However, due to factors such as adjustment coefficients for the margin and loans, the actual leverage multiple for the User may not be 5.
5. Rules for Calculation of the Loan Service Fee
5.1 Charging Rules: The simple interest shall be calculated based on the hourly service rate; hours in which fees are charged shall be calculated based on how long the User actually holds the loan; every 60 minutes is counted as one hour (from the time when the loan is issued by the Platform to the User’s cross leveraged account; any period less than 60 minutes shall be deemed as one hour). Fees shall be calculated once when the loan enters the User’s cross leveraged account, and shall be calculated once every hour thereafter.
5.2 The User can repay th loan in advance and pay the service fee according to the actual loan hours of the loan; any period less than one hour shall be deemed as one hour. The User shall pay the service fee first when repaying the loan.
5.3 The loan service fee will be accounted for in the risk rate if it is not paid. If the service fee is not offset and is unpaid for a long time, the risk rate of the User’s cross leveraged account may drop below the liquidation line, resulting in the risk of forced liquidation of the account. The User shall periodically take the initiative to pay off the service fee or leave a full available balance in the leveraged account.
6. Rules for Loan Repayment and Position Holding Rewards
6.1 Rules for Loan Repayment: The User can manually select the loan order to be repaid. They shall repay the earliest loan order first, and shall pay off the service fee before paying off the principal. After paying off the principal and due service fee of a single loan order, the status of the single loan order will become “paid off”, and the order will no longer be charged thereafter.
6.2 Rules for Position Holding Awards: The User will not be rewarded for holding leveraged digital assets loans. If the currency generates rewards (including but not limited to airdrops) during the borrowing period, the user shall return the rewards when returning the loan.
7. Risk Control
7.1 The Platform shall have the right to set the position limit for a single token type, which is used to calculate the risk rate, the purchase limit and the mount that can be transferred out of the cross leveraged account.
7.2 The User involved in the leveraged loan shall convert the net assets within the margin limit of his/her cross leveraged account as the margin, and the digital assets in other accounts shall not be included in the margin for cross leveraged trading.
7.3 The Platform shall have the right to monitor the risk rate of the User’s cross leveraged account in real time and take corresponding measures according to the change of risk rate.
For the purpose of these Rules, risk rate of the cross leveraged account = total value of assets within the position limit/ (total value of liabilities + unpaid service fee)
Wherein, the conversion of market value is denominated in USDT;
Total value of assets = current total market value of the digital assets within the position limit of the cross leveraged account. The portion of assets exceeding the position limit is not accounted for in the account risk rate.
Total value of liabilities = current total market value of all digital assets loans outstanding in the cross leverage account
Unpaid service fee = amount of each loan * duration of the loan at the time of calculation * hourly service rate - offset/paid service fee
7.4 When the risk rate of the cross leveraged account reaches 120% (“warning line”), the system will send a message to the User via his/her contact information, notifying the trading risk. Upon receipt of the message, the User shall repay the loan or transfer the full amount of the margin from the exchange account in a timely manner to ensure that the conversion rate of the margin remains above the warning line.
7.5 When the risk rate of the cross leveraged account reaches 110% (the “forced liquidation line”), the system will automatically trigger the forced liquidation, liquidating the positions in the cross leveraged account held by the user, and automatically repaying all leveraged loans of the User. If the User has more than one leveraged loan, the repayment will be made in chronological order as the loan occurs, and the loan that occurs first will be repaid first. If all the assets in the User’s cross leveraged account are insufficient to repay all loans (“worn-out position”), the Platform shall have the right to continue to recover debts from the User.
7.6 The Platform shall have the right to limit the purchase amount of tokens of a single type, to avoid reduced risk rates or even forced liquidation triggered by the purchase of tokens exceeding the position limit.
Purchase amount available = max (position limit – holding of tokens, 0) +max [(risk rate of the cross leveraged account - threshold of the buying quota risk rate) * (total value of liabilities + unpaid service fee)/ latest trading price for USDT paired trading, 0]
Wherein, the conversion of market value is denominated in USDT.
The threshold of buying quota risk rate is the threshold set by the Platform, who will adjust the threshold from time to time according to the market risk, subject to the announcements of the Platform.
7.7 The User shall be aware of the risks of leveraged trading and adjust the proportion of positions in time to avoid the risk of forced liquidation. All losses caused by leveraged account triggering forced liquidation shall be borne by the User, including but not limited to: the losses caused by the User’s failure to take appropriate measures in time after receiving the prompt message sent by the system because the risk rate of isolated leverage account reaches the warning line and then quickly reaches the forced liquidation line.
7.8 The Platform will manage the total market value of leveraged loan. When the cumulative total amount of leveraged loan on the Platform reaches the maximum amount of leveraged loan set by the Platform, the system will automatically stop leverage loan until the total market value of leveraged loan is lower than the maximum amount of leveraged loan.
7.9 The Platform will adjust the maximum amount of leveraged loan, adjustment coefficient of margin and loan, and the risk rate threshold of buying limit according to the actual market operation and risk control policies. The details please refer to The Key Elements of Cross-Margin.
7.10 After the system forcibly liquidates the cross leveraged account to repay all leveraged loan, if there is a negative-balance position, the Platform has the right to restrict the User from transferring any assets from the cross leveraged account to exchange account, or to transfer assets from the exchange account to other accounts. Meanwhile, the Platform also has the right to limit the User from withdrawing the account assets from the Platform, and the assets transferred later to the cross leveraged account will be preferentially used to return the owed leveraged loan.
7.11 To ensure the safety of all assets in the account, only when the risk rate of cross leveraged account is above 150% can the User transfer digital assets from cross leveraged account to exchange account, and the risk rate of cross leveraged account after transfer shall not be less than 150%.
Amount of transferable currency = max (currency position-position limit, 0) + max [(risk rate of cross account-150%)* (total liability + unreturned service fee) /latest trading price of USDT paired trading, 0]
8. Sub account
In Cross Leveraged Trading, the margin limit, position limit and maximum loan limit is 1/10 of the limit of the master account.