We would like to notify EMX traders of recent and upcoming changes to our margin requirement methodology. These changes will enable additional leverage for most traders. (Up to 40x.)
Previously, margin requirements were specified as fixed USD amounts per contract. We recently moved to percentage-based margin requirements. For example, previously the Initial Margin requirement for BTC-PERP was fixed at $700. Now, it is 5% of the contract's mark price. At BTC-PERP's current mark price of $9,604.50 (at the time of writing), that yields an Initial Margin requirement of $480.23. This yields a fixed Leverage of 20x for the BTC-PERP contract.
In an effort to provide additional leverage to traders with small position sizes and protect the integrity of the EMX platform, we are further adjusting margin requirements to be variable with respect to position size. As of 2019-07-31 12:00 UTC, Initial Margin and Liquidation Margin requirements for each contract listed on EMX will be specified as a base percentage plus a percentage per contract of position size. The new variable percentage-based margin requirements are specified for each EMX contract on their Contract Specifications here. We plan to make further adjustments to the base margin required over time with the intention of increasing leverage available to traders.
Variable Leverage Example (BTC-PERP):
For example, after the change the Initial Margin requirement for BTC-PERP will be:
[2.5% + 0.50% * (# of contracts)] * Mark Price
A trader long 1 contract of BTC-PERP will have an Initial Margin requirement of 2.5% + 0.50% = 3% of the current contract mark price (yielding ~33.3x leverage). If they would like to grow their position size to 2 contracts, they will need to meet an Initial Margin requirement of 2.5% + 0.50% * 2 = 3.5% of the current mark price (yielding ~28.5x leverage).