Understanding Margin Calls
A margin call is a notification you receive when your account's equity level drops below the minimum maintenance margin required by the exchange. This means that the value of your assets is no longer sufficient to cover your potential losses.
Common Reasons for Margin Calls:
- Market Volatility: Sudden price fluctuations in cryptocurrencies can significantly impact your account's margin level. If the value of your assets drops sharply, you might receive a margin call.
- Leverage: Using leverage can amplify both gains and losses. If your leveraged positions move against you, your margin level can decrease rapidly, triggering a margin call.
- Interest Accrual: Interest on borrowed funds can accumulate over time, reducing your equity. If your account's equity falls below the maintenance margin, you'll receive a margin call.
- Funding Rate: In perpetual futures contracts, the funding rate can impact your account's margin level. If the funding rate is negative and you're long, or positive and you're short, your margin level can decrease.
Checking Your Margin Level
To verify your margin level, please log in to your account and check the margin balance or margin percentage. If your margin level is below the minimum required, you'll need to take action to avoid liquidation.
How to Avoid Margin Calls
Reduce Leverage: Lower your leverage to reduce the risk of significant losses.
Add More Funds: Deposit additional funds into your account to increase your equity.
Close Positions: If your positions are moving against you, consider closing them to avoid further losses.
Monitor Market Conditions: Stay updated on market trends and be prepared to adjust your positions as needed.
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