Poloniex Futures offers leverage on all of the Futures products. Leverage is determined by the Initial Margin and Maintenance Margin levels, which specify the minimum funds you must hold in the account to enter and maintain a position. The highest leverage Poloniex Futures offers is up to 100x.
For example, if a trader uses 100x leverage to long 5 BTC at 5000 USD, he’ll need 0.05 BTC (fees not included) as margin to open the position. If the price of the contract goes up by 1%, the trader will profit 100% of his margin. Through the usage of margin and leverage, the trader has profited a higher rate of return with less funds. But if the price of the contract falls by 0.5% and if the position is in Isolated Margin mode, the position will be liquidated and all the margins will be lost. However, the maximum funds lost is only limited to the fixed amount of funds used for margin.
In this mode, funds used for a certain position is a fixed amount and any Available Balance you may have will not be used to add margin to your position. That is, the maximum funds you may lose is limited to this fixed amount. This is useful for a speculative position and traders may limit the risk in an easy way.
When Auto-Deposit Margin mode is enabled, funds in the Available Balance will be added to the existing position whenever liquidation happens, trying to prevent the position from being liquidated. This mode is useful for users who are hedging existing positions.
Traders may choose to enable the “Auto-Deposit Margin” mode in the Leverage panel or the “Positions and Open Orders” panel.
Initial Margin is the minimum amount of funds you must deposit to open a position.
Initial Margin = Order Value * Initial Margin Percentage
The calculation of the Initial Margin Percentage is based on the leverage of the order and the risk limit.
For example, if a trader uses 20x leverage to long 100 BTC, then the percentage of the initial margin is 5% and the trader needs 5 BTC in initial margin to open the position.
Maintenance Margin is the minimum amount of funds you must hold to keep a position open. Once the margin balance drops below this level, your position will be taken over by the liquidation engine and get liquidated.
Maintenance Margin = Position Value * Maintenance Margin Percentage