There are two margin modes on Billance: Isolated margin mode and Cross margin mode.
What is the Isolated Margin mode?
The isolated margin mode depicts the margin placed into a position is isolated from the trader's account balance. This mode allows traders to manage their risks accordingly as the maximum amount a trader would lose from liquidation is limited to the position margin placed for that open position.
For example, a trader opens a quantity of 1500 BTCUSD position at $10,000 by using 1x leverage. The initial margin used to open the position is 0.15 BTC. Now, he changes the leverage to 3x. The initial margin required (collateral) will then change from 0.15 BTC to only 0.05 BTC. In the event of liquidation, he will only lose the 0.05 BTC initial margin (excluding fees). This allows the trader to limit his risk.
What is the Cross Margin mode?
It is default margin mode on Billance. The cross margin mode uses all of a trader’s available balance within the corresponding trading pair coin type to prevent liquidation. When the trading pair's equity is lower than the maintenance margin, the position will be liquidated. In the event of liquidation, the trader will lose all his/her equity for that particular trading pair.
For example, a trader opens a BTCUSDT position. When the BTCUSDT position is liquidated, he will lose all of his USDT balance. BTC balance will not be affected.
Adjustment of holding position leverage
Billance Perpetual Contracts provides a position leverage adjustment function. When the user wishes to increase leverage, the adjustment will succeed if the system detects that the adjusted leverage multiple is less than the maximum leverage multiple for the current position. After the adjustment, the margin required to open the current position will be reduced. When the user wishes to reduce the leverage, the system detects if the adjusted margin reaches the maintenance margin level, if it reaches 0.5%, the leverage adjustment is successful, otherwise the adjustment has failed.
Leverage adjustment is not supported when the user has a current orders.
As Billance positions in the same direction will be merged, in case the user has a position, after adjusting the leverage multiplier and opening a new position, the leverage multiplier of the original position will also change.
Different leverage and margin models are supported for different trading pairs.