Portfolio Margin Account-Terminology

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Announcements Portfolio Margin Account-Terminology

Portfolio Margin Account-Terminology

2023-02-28 13:06:24 UTC 15285 Read

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### At the Dimension of Account
| <div style="width:200px"> Term </div> | Definition  | Formula  |
| ------------ | ------------ | ------------ |
| Account Equity   |  USD value of all assets in the account, liabilities deducted | Account Equity = ∑(Equity x Index Price)    |
| Portfolio Margin Balance  |USD value of Portfolio Margin Balance in the Portfolio Margin Account   | Portfolio Margin Balance = ∑(Positive Equity x Index Price x Adjustment Factor) + ∑(Negative Equity x Index Price) - Haircut Loss|
| Total Liabilities   | USD value of total liabilities in the account   |Total Liabilities = ∑(Liabilities x Index Price)|
|  Portfolio Initial Margin Level | When the Portfolio Initial Margin Level is below 100%, the system will auto-cancel all pending orders that are not to reduce positions in futures.   | Portfolio Initial Margin Level = Portfolio Margin Balance / Portfolio Initial Margin    |
| Portfolio Maintenance Margin Level    | When the Portfolio Maintenance Margin Level is no more than 110%, the system will auto-repay the debt with assets in the account; Portfolio Maintenance Margin Level ≤ 100% will trigger liquidation.   |Portfolio Maintenance Margin Level = Portfolio Margin Balance / Portfolio Maintenance Margin    |

### At the Dimension of Coin
|  <div style="width:150px"> Term </div>  | Definition  | Formula  |
| :------------ | :------------ | :------------ |
| Liabilities  | Actual liabilities of a coin, including Spot Borrowed and negative balance of a coin caused by futures PNL and auto interest deduction |Liabilities of a coin = Spot Borrowed + ABS[Min(Available Balance + Futures Initial Margin + Futures Unrealized PNL, 0)]|
| Equity| Assets of a coin in the Portfolio Margin Account, liabilities deducted  |  Equity = Account Balance + Futures Unrealized PNL - Spot Borrowed; Account Balance = Available Balance + Occupied|
| Available Balance  | Available Balance of a coin  | /  |
|  Spot Available |Assets in spot account that can be used for spot trading and margin trading   | When margin trading is enabled, Spot Available =  Available + Borrowable; when margin trading is disabled, Spot Available =  Available |
| Futures Available  |The value of Portfolio Available Margin in the current futures settlement coin |  The available margin of the account; Portfolio Available Margin = Portfolio Margin Balance - Portfolio Initial Margin|
| Max Borrowable  |The maximum borrowable amount of this coin under the current initial margin level   | Min (Portfolio Available Margin/Spot Initial Margin Level/USDT Value of the Index Price of the Borrowed Coin, Maximum Loan for the Coin)|
| Occupied  | The sum of the assets of a certain coin occupied by spot open orders and futures initial margin|  Occupied = Assets Occupied by Spot Open Orders + Futures Initial Margin |

### Example

Suppose that user A's trading status after activating Portfolio Margin Account is as follows:  (unrepaid interest and fees are neglected):
1 USDT=1 USD
1 BTC=10000 USD

### At the Dimension of Coin
| <div style="width:150px"> </div>  | USDT  | BTC  |
| :------------ | :------------ | :------------ |
| Liabilities  | 0  |  0.02 |
| Available Balance  | 400  |  0.02|
| Equity  |  400+50+50-100=400 | 0 |
| Max Borrowable | 284/33.00%=860.60; 284 is the amount of Portfolio Available margin, the calculation of which can be seen in the next table.|284/33.00%/10000=0.08606;  284 is the amount of Portfolio Available margin, the calculation of which can be seen in the next table. |
|Occupied  |   50+50=100|  0 |

### At the Dimension of Account
| Term  | Formula  |
| :------------ | :------------ |
|  Account Equity | (400+50+50-100)+(0.02-0.02)*10000=400 USD   |
|  Portfolio Margin Balance | 400+0=400 USD  |
|  Total Liabilities |  0+0.02*10000=200 USD  |
|Portfolio Initial Margin|200*33.00%+50=116 USD   |
| Portfolio Maintenance Margin | 200*10%+10=30 USD   |
|Portfolio Available Margin|400-116=284 USD    |
|  Portfolio Initial Margin Level |  400/116=344.83% |
|  Portfolio Maintenance Margin Level  | 400/20=2000%  |

Go to [About Portfolio Margin Account Margin](https://www.gate.io/help/trade/portfolio/28672/about-portfolio-margin-account-margin "About Portfolio Margin Account Margin") to see relevant definitions and calculation formulas of terms at the dimension of account.

### About the Haircut Loss
Assets in the Portfolio Margin Account will be given respective adjustment factors based on their liquidity to calculate their value in USD, and further to calculate the overall balance in the Portfolio Margin Account. As the adjustment factors of different coins could be different, there will be a haircut loss to Portfolio Margin Balance after a trade. The haircut loss is the reduced amount of portfolio margin balance. After you place an order, the system will give an estimated haircut loss and include it into the calculation of the Portfolio Margin Balance.

**Formula:**
Haircut Loss = Max (Pre-Trade Coin A Amount x Last Price x Adjustment Factor of Coin A - Post-Trade Coin B Amount x Last Price x Adjustment Factor of Coin B, 0)
Portfolio Margin Balance after placing the order = Portfolio Margin Balance before placing the order - Haircut Loss

**Example:**
Account Status:
User A has a principal of  200 USDT, borrowed 300 USDT, bought 3GT (1GT= 100 USDT, the adjustment factors for GT and USDT are 1).

Portfolio Initial Margin: 300 x 33.00% = 99
Portfolio Maintenance Margin: 300 x 10% = 30
Portfolio Margin Balance: 200
Portfolio Initial Margin Level: 200/99=202.02%
Portfolio Maintenance Margin Level: 200/30=333.3%

Trade in the DOGE/GT market.

The adjustment factor for GT is 0.9 (1 DOGE=1 GT, 1 DOGE=100 USDT)

Assets before placing an order: borrowed 300 USDT, 3 GT

Place an order to buy 1 DOGE with 1 GT.
Order value before placing the order: 1 x 100 x 1=100
Order value after placing the order: 1 x 100 x 0.9=90
Haircut Loss: 1 x 100 x 1-1 x 100 x 0.9=10
Portfolio Margin Balance after placing the order = 200-10=190

When you submit an order, the system will calculate the haircut loss and the change of equity and further give the estimated Portfolio Margin Balance, Portfolio Initial Margin Level after placing this order. If the estimated Portfolio Initial Margin Level is below 100%, the system will stop the order and the order will fail.

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