What is Margin Trading?
Margin trading refers to borrowing funds from a platform and using a small amount of principal to create a higher position than the original capital in order to achieve higher returns. Currently AAX offers triple Margin Trading.
What currencies are supported by Margin Trading?
Currently, AAX supports Margin Trading in three coins: USDT, BTC, and ETH.
Is there any interest on Margin Trading? How is the interest calculated?
Margin trading generates interest. Interest is charged on an hourly basis. The system will charge interest once every hour at the end of the hour. For example, if you borrow a coin at 10:00:01 and finish repaying it at 10:59:59, no interest will be charged; if you borrow a coin at 10:59:59 and return it at 11:00:01, interest will still be charged for one hour even the borrowing time is less than one hour.
The current daily interest rates for USDT, BTC and ETH are 0.03%, 0.02% and 0.02% respectively. Interest calculation formula: Interest = Borrowing amount * (currency daily interest/24) * Number of full hours. For example, if you borrow 100 USDT at 10:00:01 and return it successfully at 12:59:59, there are two full hours：11:00:00 and 12:00:00. interest = 100*(0.03%/24)*2=0.0025 USDT
Note: The borrowing rate of coin may be adjusted in different periods
Which account's assets are used for Margin Trading?
Margin Trading is a separate account. You need to transfer assets from other accounts to the margin account before you can conduct Margin Trading. Transactions in leveraged accounts do not affect assets in other accounts
How do I increase my borrowing limit?
The limit can be increased by transferring more margin. The maximum amount of coins that can be borrowed for an individual user is 30,00 USDT, 1.5 BTC and 20 ETH.
Note: The maximum amount of coins that can be borrowed by individuals may be adjusted at different times.
If the order is not completed, do I need to manually return the currency?
The system has automatically borrowed money for you when you place the order and you need to return the coins manually regardless of whether the order is completed or not. If you do not repay the coins manually, the borrowed coins will generate the corresponding interest.
Does Margin Trading support Isolated Margin mode?
AAX currently only supports the Cross Magin mode, and does not support Isolated Margin mode so far, BTC, ETH, and USDT can be used as margin for leveraged accounts
About Margin Account Margin Rate and Liquidation
When the margin level is less than or equal to 10%, the system will issue an alert notice indicating that the margin account is at risk of being liquidated and it is recommended to transfer more margin to reduce the risk of account liquidation.
When the margin rate is less than or equal to 3%, the margin account has reached the system liquidation line. The account will be liquidated and the system will execute a liquidation process, which will force trades to sell assets held in the margin account to repay the loan. At the same time, the user will be informed through email and internal mail.
Calculation of margin level:
Margin level = Margin Value / Total Borrowings
Margin Value = Account Coin Value - Total Borrowings
Account Coin Value = Quantity of coins * Mark Price * Currency Weight (weight of BTC, ETH, USDT are 0.975, 0.95, 1)
Total Loan = Coin Quantity * Mark price