BigONE Margin Trading FAQ

How much is the trading fee?

The trading fee for each transaction is 0.1%. It is the same as the trading fee in the spot market.

How to calculate Margin Level?

Margin Level = Total Asset Value / (Total Borrowed + Total Accrued Interest)

What are the types of margin?

Currently, you can only choose an isolated margin. Isolated margin means that the margin is restricted to a certain amount. If the margin level is lower than the minimum maintenance margin requirement, the holdings of this particular market are liquidated. Even though you would lose the account equity of this market, your other accounts would not be affected.

How to calculate the amount that can be borrowed?

The amount that can be borrowed = Account Equity * (Leverage - 1) - The amount that has been borrowed. 

For example, if the highest leverage is 3x leverage, and you haven’t borrowed any funds, the amount that can be borrowed is twice the amount of Account Equity.

How is interest calculated?

Total Interest Accrued = Total Borrowed * Interest Rate (hourly) * Number of Time Periods (in hours)

The interest of the first hour after borrowing is automatically deducted when borrowing funds.

If the interest rate is changed within the hour, this hour’s interest is calculated based on the previous interest rate, and the next hour’s interest is calculated based on the new interest rate.

For example, User A borrowed 1000 USDT from BigONE at 13:00 on a certain day. The hourly interest rate was 0.0042%. If at 14:30 today, BigONE adjusts the USDT hourly interest rate to 0.0052%, the hourly interest rate for the period 14:00-15:00 today is still 0.0042%, and from 15:00 onwards, the hourly interest rate will be 0.0052%.

What is the highest leverage BigONE offers in margin trading?

The highest leverage BigONE offers in margin trading is up to 3x leverage.

What is margin trading?

Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions. Essentially, margin trading amplifies trading results so that traders can realize larger profits on successful trades.

How to trade on margin at BigONE in a bull market?

For example, let’s say you have 10,000 USDT in your margin account, and you want to trade in BTC/USDT. If you believe the spot price of BTC will rise from 10,000 USDT to 12,000 USDT, and the highest leverage BigONE offers in margin trading is up to 3x leverage, you can borrow 20,000 USDT from BigONE, and use the total 30,000 USDT to buy 3 BTC. After the spot price of BTC rises to 12,000 USDT, you can sell 3 BTC at market price, and repay the 20,000 USDT principal. You will earn a profit of 3 * (12,000 - 10,000) = 6,000 USDT (assuming no interest and fees), instead of the 2,000 USDT profit you will earn without any leverage.

How to trade on margin at BigONE in a bear market?

For example, let’s say you have 10,000 USDT in your margin account, and you want to trade in BTC/USDT. If you believe the spot price of BTC will fall from 10,000 USDT to 8,000 USDT, and the highest leverage BigONE offers in margin trading is up to 3x leverage, you can borrow 2 BTC (since the spot price of BTC is 10,000 USDT/BTC at the moment), and sell the borrowed BTC at 10,000 USDT/BTC for 20,000 USDT. After the spot price of BTC falls to 8,000 USDT, you can buy 2 BTC at 8,000 USDT/BTC, and repay the 2 BTC principal. You will earn a profit of total 20,000 - (8,000 * 2) = 4,000 USDT (assuming no interest and fees). Margin trading allows you to profit in a bear market via short selling.

What is the interest rate on margin trading?

The daily interest rate for all coins is 0.1%. The interest is not compounded, and it is charged hourly at 0.0042%.

What are the risks of margin trading?

1) Amplified losses -- Margin trading can amplify a trader’s gains significantly. However, it can also increase his or her losses. Traders can end up losing more than what they initially invested in.

2) Liquidation -- If the borrower has incurred too large a loss because of underperforming securities, the margin level may go below a certain point. When it happens, the holdings will be sold at an undesirable price by the liquidation engine to repay the principal and interest.

What are the ways to manage margin account risk?

1) Use leverage wisely and manage your position with caution.

2) Know when to take profit and stop loss. Close position when you can.

3) Add more margin when needed, making sure the margin level is greater than 115%.

Margin Trading Additional Instructions

Interest

The daily interest rate for all coins is 0.1%. The interest is not compounded, and it is charged hourly. The interest will be automatically deducted from your margin account every seven days after you borrow funds. If the available balance in your margin account is less than the accrued interest, BigONE will liquidate some of your holdings in the margin account to pay off the interest.

Liquidation

1. Liquidation Alert

BigONE monitors the market movements and uses the margin level to evaluate the risk level of all margin accounts. When 1.15 ＜ margin level ≤ 1.3, our system will trigger a margin call, and you will receive a notification through email and text message.

2. Liquidation Notification

When the margin level ≤ 1.15, your holdings will be liquidated, and you will receive a notification through email and text message.

3. More on liquidation

When the margin level reaches 1.15, the account is taken over by the liquidation engine. During the liquidation process, all of your open orders are canceled, you can’t trade, borrow, or transfer funds from your margin account to your other accounts. The liquidation process will end only after the total debt is repaid. After liquidation, you can transfer the remaining funds from your margin account to your other accounts as long as the margin level is high.

Note: After liquidation, how to calculate the remaining debt?

You need to pay off the remaining debt if the total debt is greater than the liquidated asset. If the remaining debt is not paid in time, you can’t use the sell function of the spot market, and the withdrawal function of the fiat market.

Instructions for borrowing

The amount that can be borrowed = Account Equity * (Leverage - 1) - The amount that has been borrowed. 

Note: The interest of the first hour after borrowing is automatically deducted when borrowing funds.

Instructions for repayment

The repayment priority: If you have more than one debt, the oldest debt will be repaid first. For any debt, interest is repaid first, then the principal.

After the principal and interest of one debt is paid in full, the status of this debt will be changed to “Paid in Full”, and the interest will stop accruing. In the events of crypto airdrops or forks for the borrowed coins, the borrower needs to repay the coins he or she receives from the events. Please follow the newly released Announcements for details.

The daily interest rate is 0.1%. The interest is charged hourly (the hourly interest rate is approximately 0.0042%).

You can choose to repay 100% of the amount that you’ve borrowed or to repay part of it. Regardless of which method you choose, the interest will be repaid first.

The repayment priority remains the same if liquidation occurs.

You need to repay the same coin as what you borrowed.

The interest will be automatically deducted from your margin account every seven days after you borrow funds.

Miscellaneous

Traders are subject to the laws of their countries and terms of service of BigONE. BigONE reserves the right to freeze traders' margin accounts, and liquidate traders’ holdings, for the purpose of maintaining the stability of the margin market.

Note: BigONE reserves the right to modify the interest rate of borrowed funds at any time according to market conditions.

If the trading rules of margin trading are changed, please follow the latest Announcements to learn about it.

Risk Reminder: Digital assets are volatile. Please make trading decisions prudently based on your risk tolerance.