1.What is Margin Trading?
Margin trading means that users can borrow through the platform, thereby obtaining more funds for trading, multiplying the principal by several times, making larger investments with small funds, realizing small profits and double profits.
2. Interest Rates & Repayment Rules
2.1 Interest rate calculation:The daily interest rate of the loan is updated every hour. The platform dynamically calculates the benchmark interest rate per hour according to the change of supply and demand of the borrowed currency. It is used to calculate the actual daily interest rate of the user, and the actual daily interest rate of the loan at the hour of the hour will be updated.
2.2 Rules for rate maintenance:The loan daily rate for a loan borrower locks for 24 hours after each update for the user to maintain the cost of the loan for 24 hours. The daily rate is updated every 24 hours to the latest loan daily rate. For example, if User A borrows BTC at 15：55 Oct 01, 2019, and the loan daily rate is 0.001, the rate on every hour before 15：55 Oct 01, 2019 is 0.001/24. At 15：55 Oct 02, 2019 when the loan daily rate of the BTC loan for User A is updated, the loan daily rate at 15：00 Oct 02, 2019 will be taken for the calculation. If the actual daily rate at that time is 0.0015, the loan daily rate for User A will be updated to 0.0015 and maintain for 24 hours. The BTC actual loan daily rate will be updated again at 15：55 Oct 03, 2019.
2.3 The loan borrower should repay the capital and interest on the loan maturity date. The interest is calculated in simple interest on an hourly interest rate (daily rate / 24). An interest-bearing hour is counted from the time the loan is made. Every 60 minutes is considered as 1 hour (counted from the borrowing time; partial hour is considered as full hour). Interest is incurred at the time the loan is made and every 1 hour afterward.
2.4 Repayment: Repayments will be used to cover the earliest loan orders, and pay off interest before principal. The repayment status will change to completed once all the debts have been paid off, then further interest will not be applied for the order. In case of a new asset being generated from an event, such as an airdrop and a fork, margin borrowers of the affected asset should repay the bonus asset all together with their margin loans. Please refer to related announcements for the handling.
3.Index Price
To avoid unnecessary liquidations, we use a composite price index rather than last price for margin level calculation,In order to ensure that the leveraged index price reasonably reflects the fair spot market price of each currency, we will select the currency pairs of the eight mainstream exchanges as the index weight component for each leveraged transaction currency.
3.1 A total of 8 exchange data is currently being crawled, including Binance, Huobi, OKEx, CoinCola, Bitstamp, Coinbase, Kraken and Bitfinex.
3.2 The index price is calculated by weighted average of each exchange, and the weight can be freely configured. All exchanges currently configured have the same weight, which is equivalent to direct averaging.
3.3 Filter valid data before calculation.
- When the exchange price exceeds/below the median price of the remaining exchanges by 10%, it is calculated as only exceeding/below 10%.
- If the valid data is less than 10% within 24 hours, the result will not be counted.
- When an exchange data has not been updated for a long time, it is not included in the calculation result.
4.Margin Trading Glossary
4.1 Total Assets: Available Assets + Frozen Assets.
Borrowed Assets: Total Borrowed amount of tokens by using your available asset in Margin Account for Spot as collateral.
Available Assets: The total amount of tokens available for trading in Margin Account for Spot.
Assets on hold: The amount of tokens which is unavailable for creating orders, usually refers to the tokens that are currently in use for open orders.
Transferred Assets: The amount of tokens transferred from other accounts to your Margin Account for Spot.
4.2 Margin Ratio : (Own Assets - Unpaid Interest) / Borrowed Asset; ie:
Margin Ratio = (Total assets - Total Borrowed - Unpaid Interest) / Total Borrowed.
Total Assets (In Quote Currency) = Total Assets of the Base Currency * price + Total Assets of the Quote Currency.
Total Borrowed (In Quote Currency) = Base Currency Lending * price + Quote Currency Lending.
Unpaid Interest (In Quote Currency) = Unpaid Interest of the Base Currency * price + Unpaid Interest of the Quote Currency.
Liquidation price: the price of the Margin ratio ≤ 10%.
4.3 Formula (Est. Price of Margin Call): Forced Margin Call Est. Price = (Borrowed Assets (In Quote Currency) * (1+Margin Call ratio) + Interests Payable (In Quote Currency) – Total Assets (In Quote Currency) / (Total Assets (In Base Currency) – Interests Payable (In Base Currency) – Borrowed Asset (In Base Currency) * (1+Margin Call Ratio)).
4.4 Example of margin ratio calculation: A user trades BTC/USDT on the margin trading market, the quote currency is USDT and the dealt currency is BTC. The user holds 0.3 BTC, borrows 0.6 BTC, and then sells all 0.9 BTC. After a while, the total asset in the dealt currency is 0 BTC and that in the quote currency is 9,000 USDT, the interest is 0.001 BTC and the last trading price is 10000.00. “The margin ratio =[9000 - (0.6 + 0.001)*10000.00] / (0.6 * 10000.00)*100% = 49.83%” “The estimated forced-liquidation price = (0 + 0*54.31% + 0 - 9000) / (0 - 0.001 - 0.6 - 0.6*54.31%) = 9710.204”.
4.5 Maximum leverage formula: Max leverage = (Total assets - outstanding loan - interest payable) * (max leverage multiplier - 1) - outstanding loan.
Example of maximum margin lending: A user holds1000USDT in total. Outstanding loan is100 USDTand interest 1USDT. If the maximum leverage level is 5x, “the maximum margin lending amount =（1000 - 100 - 1）*（5 - 1）- 100 = 3496 USDT”.
5. Additional Terms
5.1 The terms not less than, within, not more than are all inclusive terms and the terms less than, beyond and over/below are exclusive terms. Daily interest will be accrued according.
5.2 The terms are established by our company. This document or any further amendments are in effect immediately after make known through publication.
5.3 We reserve the right of interpretation of this document.
5.4 The terms are implemented since Nov 07, 2019.
Thank you for your support to CoinCola.
CoinCola Team
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