At EQUOS, accounts have the option to trade perpetual futures with leverage. This means that each dollar of notional exposure can be funded with a smaller amount of capital.

Leverage: the ratio between your margin balance and the notional exposure of your portfolio.

Explicitly:

Total Notional Position = Position Size * Mark Price

Account Leverage = abs(Total Notional Position) / Total Account Margin

The amount of leverage available depends on your position size - to open a larger sized position requires a relatively larger amount of capital than to open a smaller sized position. The amount of capital required to open the position is also referred to as Initial Margin. A trader may choose to reduce their leverage at any time by increasing the balance in their account.

Initial Margin: the minimum amount of USDC required to open any new position.  

The Initial Margin includes both open position(s) and open order(s) for leveraged products. Initial Margin for open positions is calculated based on the Mark Price. The Initial Margin requirement at the time of sending the order depends on the order type. When sending a limit order, the Initial Margin requirement is calculated based on the limit price. When sending a market buy order, a 5% buffer to the best ask price is added to the Initial Margin calculation to account for the possibility that the order is executed through the book that would increase the notional of the trade. The Initial Margin requirement for a market sell order is based on the best bid.

The part of the Initial Margin that relates to open orders is called Reserved Margin. On EQUOS, Reserved Margin is split out into ‘Reserved Margin Buys’, which is the margin reserved for all open buy orders, and ‘Reserved Margin Sells', which is the margin reserved for all open sell orders.

The Initial Margin is always calculated based on the maximum notional exposure of current open positions and open orders. This means that if a trader has an open order which, if executed, would reduce the trader’s current open position, the Initial Margin would not reduce until the order is filled. The Reserved Margin Buys (if the position is short and the order is a buy order) or Reserved Margin Sells (if the position is long and the order is a sell order) will be negative, but the Initial Margin does not yet include the negative amount. Only if the orders get executed, will the Initial Margin be reduced.

Conversely, if a trader has an open order which, if executed, would increase the trader’s open position, the Initial Margin would increase immediately. This could for example be the case when a trader is long and sends a buy order, or when the trader is long and sends a sell order that would result in a short position that is larger in absolute value than the current long position. In these cases, either Reserved Margin Buy or Reserved Margin Sell would be positive, and this amount would already be included in the Initial Margin amount.

When a trader’s account’s margin level, the Total Account Margin, falls below the Initial Margin requirement, no new orders can be sent unless such order, when executed, would reduce the overall margin requirement. Existing orders remain in the order book as they are included in the current margin calculations.

Total Account Margin: total USDC equivalent notional of all assets available for margin, including any unrealized P&L, less any capital required for open non-margin (spot) orders.

Currently, only USD and USDC can be used as margin.

When the Total Account Margin reaches the level of the Margin Liquidation Trigger, the account will start to get liquidated. The Margin Liquidation Trigger is set to 50% of the Initial Margin required for the open position(s) only, not open orders. It is independent of the Total Account Margin in the account at the time when the trade was executed.

Margin Liquidation Trigger: the minimum amount of USD equivalent notional required to avoid liquidation. If the Total Account Margin falls below the Margin Liquidation Trigger, the account’s positions will get liquidated.

More information on forced liquidations at EQUOS, including the process and the fees, can be found here Liquidations.

Leverage Limits for Spot products

No leverage is available for spot products, all spot trades need to be 100% funded at all times.

Leverage Limits for Perpetuals

EQUOS offers a maximum of 125x leverage on Perpetual positions. The maximum amount of leverage allowed for specific position sizes depends on which Perpetual product is traded, and is shown in the tables below. By design, our position limits align the expected risk on the platform with regard to trading volume and the size of the Liquidation Reserve. This is to reduce the probability of auto-deleveraging (ADL). These limits will be reviewed regularly and amended as necessary.

The Initial Margin required for a certain size position follows a tax style bracket approach, starting from the highest leverage bucket. If you trade more than one Perpetual product (e.g. BTC Perpetuals and ETH Perpetuals) the total Initial Margin required is the sum of the Initial Margin required for each product (e.g. Initial Margin required for the BTC Perpetual Position plus the Initial Margin required for the ETH Perpetual position). The same applies to the Margin Liquidation Trigger.

BTC Perpetual Leverage Limits

Leverage

Max notional exposure (USDC)

Initial Margin

Margin Liquidation Trigger

125.0

10,000

0.80%

0.40%

100.0

25,000

1.00%

0.50%

75.0

50,000

1.33%

0.67%

50.0

150,000

2.00%

1.00%

40.0

250,000

2.50%

1.25%

20.0

400,000

5.00%

2.50%

10.0

700,000

10.00%

5.00%

5.0

1,000,000

20.00%

10.00%

4.0

1,500,000

25.00%

12.50%

3.3

2,500,000

30.00%

15.00%

2.0

12,500,000

50.00%

25.00%

1.5

25,000,000

66.67%

33.33%

1.0

N/A

100.00%

50.00%

ETH Perpetual Leverage Limits

Leverage

Max notional exposure (USDC)

Initial Margin

Margin Liquidation Trigger

125.0

1,000

0.80%

0.40%

100.0

2,500

1.00%

0.50%

75.0

5,000

1.33%

0.67%

50.0

15,000

2.00%

1.00%

40.0

25,000

2.50%

1.25%

20.0

80,000

5.00%

2.50%

10.0

140,000

10.00%

5.00%

5.0

200,000

20.00%

10.00%

4.0

300,000

25.00%

12.50%

3.3

500,000

30.00%

15.00%

2.0

2,500,000

50.00%

25.00%

1.5

5,000,000

66.67%

33.33%

1.0

N/A

100.00%

50.00%

Example

To illustrate the above, assume a trader wants to buy 100,000 USDC worth of EQUOS BTC Perpetual Futures. To do so, the Initial Margin requirement would be:

10,000 x 0.8% = 80
15,000 x 1.0% = 150
25,000 x 1.33% = 332.50
50,000 x 2.0% = 1,000
Total = 1,562.50 USDC
Leverage = 100,000 / 1,562.50 = 64x

The Margin Liquidation Trigger would be 50% of the initial margin requirement, 781.25 USDC.

As long as the Total Account Margin is more than 1,562.50 USDC, the trader is able to continue to buy BTC Perpetuals up to the point where the Initial Margin requirement equals their Total Account Margin balance. If the Total Account Margin balance reaches 1,562.50 USDC or below, they are no longer able to send any new buy orders. They can still send sell orders to reduce the overall exposure.

If the margin balance continues to decline to the liquidation trigger of 781.25 USDC or below, the account will be moved into forced liquidation to close down the position.

Eligible Collateral

Currently, EQUOS accounts can only use USD or USDC as margin for trading EQUOS perpetual futures. Any USD is converted into USDC on a 1-for-1 basis.

For further assistance or more information, please contact our Customer Support team via help@equos.io or click on the chat widget at the bottom right-hand side of the EQUOS page.

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