Dear Poloniex Users,
To better serve our users, Poloniex is launching the beta version of cross margin trading on November 30. The cross margin trading beta allows users to trade cross margin with spot accounts and use the "Auto-Borrow & Repay" feature, bringing the user experience to the next level. Come and join the cross margin whitelist and go on an exciting ride with Poloniex!
Click here to join the whitelist>>>
Q&A:
Q1: How do I know that I have successfully joined the whitelist?
Answer: After you have submitted the application form, Poloniex will review your application. Once it is approved, you can enable cross margin trading on your trading page.
Q2: What is cross margin, and what are its advantages?
Answer: In the cross margin mode of spot trading, the assets are shared by all positions as margin. Compared with the more common isolated margin mode, cross margin allows you to offset losses with the gains across positions, which enables efficient fund utilization and reduces your chances of getting liquidated.
Q3: What is the maximum leverage of Poloniex cross margin trading? Which assets can be used as margin?
Answer: Poloniex cross margin trading supports a maximum leverage of 3x. In phase 1, USDT, BTC, ETH, and TRX can be used as margin.
Q4: How to borrow under the cross margin mode? Which assets are available for borrowing?
Answer: We have launched a new "Auto-Borrow & Repay" mode with the cross margin product. By enabling "Auto-Borrow", you will be able to borrow cryptos in trading, transfers, and withdrawals. The buy/sell/transfer/withdrawal amount exceeding your available amount of the currency will be your loan, and Poloniex will calculate your borrow limit based on the overall margin ratio of your spot account. In phase 1, USDT, BTC, ETH, and TRX are available for borrowing.
Q5: How does Poloniex set the interest rates for different currencies in the cross margin mode?
Answer: We use interest rates on major crypto exchanges as a reference and adjust them dynamically based on user demand on Poloniex. We are confident that Poloniex offers the most competitive interest rates in the market. You can check information such as the interest rate, borrow limit of different currencies, currencies borrowable, and collateral rate in Profile > Fee Schedule > Interest Rate & Borrow Limit.
Q6: How is interest charged in the cross margin mode?
Answer: Interest in cross margin trading is charged on an hourly basis. Interest would incur by the hour on any assets you may have borrowed. Interest calculation formula:
- Interest = Borrowed * Daily interest/24
Borrowed amount would incur when you successfully place an order with a loan (open orders also incur interest), transfer or withdraw an amount that exceeds the available amount of the currency, and at times when your interest accrues hourly.
Q7: How to repay loans under the cross margin mode?
Answer: With the new "Auto-Borrow & Repay" mode enabled, every time you buy/transfer/deposit in a currency where you have a debt, Poloniex will automatically repay your loan to free you of extra interest charges.
Q8: Can you get liquidated under the cross margin mode?
Answer: There is a likelihood that your position will be liquidated even in the cross margin mode. You can check the margin ratio of your account anytime on the account or trade page. When your margin ratio falls below 150%, Poloniex will send you a Margin Call email requesting more funds to be added to your margin, and you will not be able to take on new loans at this point; when your margin ratio falls below 100%, Poloniex will freeze and liquidate your spot account.
Q9: What is Mark Price in cross margin?
Answer: Poloniex uses Mark Price as a reference in liquidations. It is an estimated fair value of an asset. Mark Price on Poloniex is an aggregate price extracted from nine major crypto exchanges (Binance, Huobi, OKX, BinanceUS, Poloniex, Digifinex, Bibox, Kucoin, and Bitfinex), weighted by their relative volume.
Q10: What is Collateral Rate in cross margin?
Answer: Poloniex applies a value haircut to the assets in your account when they are used as margin because prices of crypto assets are highly volatile, and Poloniex factors this fluctuation into their valuation for risk mitigation. For example, if you want to use BTC (priced at $20,000) as margin and its collateral rate is 0.95, then each BTC will be valued at $19,000 ($20000*0.95 = $19000) when used as margin.
Q11: What are Initial Margin and Maintenance Margin in the cross margin mode?
Answer: The collateral required for you to take on each new loan is defined as Initial Margin.
- Initial Margin = Borrow amount * Last price of the currency * Initial margin ratio of the currency.
The maintenance margin is the minimum amount of collateral required to keep your margin positions from being liquidated.
- Maintenance margin = Borrow amount in the currency * Last price of the currency * Maintenance margin ratio of the currency
Click here for a full list of the initial margin and maintenance margin requirements for different currencies.
Q12. How is Margin Ratio calculated under Poloniex cross margin mode?
Answer: The calculation formulas are as follows:
- Margin ratio = Total margin/Maintenance margin (10%)
- Total margin = Effective balance + Total debts
- Effective balance = ∑(Balance of the currency * Last price of the currency * Collateral rate of the currency)
- Total debts = ∑(Debt in the currency * Last price of the currency)
Notes:
- Users should join the cross margin beta whitelist voluntarily.
- Once the application is approved, users can enable cross margin trading on their trading page. Users who join this beta test may risk asset loss and forced liquidation; please make prudent trading decisions.
- Accounts that are frozen, closed or based in a prohibited country are not eligible for the cross margin beta test. The list of prohibited countries/regions is as follows: Crimea, Democratic Republic of Congo, Iran, Iraq, Libya, Mali, North Korea, Palestine, Syrian Arab Republic, Somalia, Sudan, Zimbabwe, Afghanistan, Cote d'Ivoire, Yemen, Lebanon, Myanmar, the Chinese Mainland, Cuba, the United States of America and all U.S. territories.
- The rules of the event shall be subject to Poloniex's interpretations and decisions, which shall be final.
Risk warning: There is a risk of forced liquidation in cross-margin trading. Please make your own rational judgments and prudent trading decisions. Thank you for supporting Poloniex!
Poloniex Team
December 1, 2022
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