### 1. What is Margin?

Margin is a good-faith deposit, or an amount of capital one needs to post or deposit to hold position.

### 2. Margin Calculation

There are 2 margin modes available in DragonEx: Cross Margin Mode and Fixed Margin Mode. For Cross Margin Mode, the Position Margin required varies with the price movements. For Fixed Margin mode, the Position Margin remains the same even the price fluctuates.

### 3. The relation between Margin required and Leverage.

Leverage allows traders to enter a position which is worth much more by committing only a smaller amount of money. The gain or loss is therefore, greatly magnified.

When a user opens a certain position, the required Initial Margin = Position Value / Leverage.

*Example:*

*If the current BTC price is USDT 10,000, and a user wants to open a 10x long position of futures contract that is worth 1 BTC, the number of contracts opened is 1 BTC/0.0001BTC=10000*

*Initial Margin = Position Value / Leverage = Face Value x Number of Contracts x Average Position Price / Leverage = 0.0001 BTC x 10000 x 10,000 USDT/BTC / 10= 1000USDT*

### 4. Leverage, Initial Margin, Maintenance Margin, and Margin Ratio

Leverage: the leverage level chosen by the user when opening a position

Initial Margin Ratio: 1 / Leverage

Maintenance Margin Ratio: the lowest required margin ratio for maintaining the current open positions. When the Margin Ratio drops below the Maintenance Margin Ratio+ Liquidation fee rate, liquidation will be triggered.

Margin Ratio:

Margin Ratio = (Balance + RPL + UPL) / (Position Value + Withholding Margin of Working Orders x Leverage)

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