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    The Risk Control Mechanism of Portfolio Margin Account
    Gate.io
    Updated at:10 days 23 hours ago
    Gate.io uses the total initial Margin and total maintenance Margin rate to evaluate the risk level of a user's Portfolio Margin Account, based on a numerical value, the system will perform risk control operations on the Portfolio Margin Account according to the automatic canceling orders, forced repayment and forced liquidation.
    Automatic cancellation
    When the total initial margin rate is <100% , the system will automatically cancel all non-reduction pending orders in the USD perpetual contract of the Portfolio Margin Account to reduce the occupation of margin by pending orders.
    During the specific operation, the system will automatically cancel the pending orders with a small amount to reduce the impact on the trader's trading operations, and check in real time whether the total initial margin of the account is ≥ 100% or not, if it is, the automatic order cancellation operation will be terminated.
    Example
    The current positions and pending orders of user A's Portfolio Margin Account are as follows:

    Positions

    100 BTC/USD contracts Last Price 51000

    -200 ETH/USD contracts Last Price 1900

    Pending orders

    Order 1300 BTC/USD contracts Price 50000

    Order 2500 BTC/USD contracts Price 49000

    Order3-100 ETH/USD contracts Price 2000



    Firstly, compare the market positions of BTC/USD with the ETH/USD
    The market position value of BTC/USD is 100 * 51000 * 0.0001 = 510 USD
    The market position value of ETH/USD is 200 * 1900 * 0.01 = 3800 USD
    The system will compare the size of the market position and choose BTC/USD market with a smaller position to cancel the order. Since the pending order 1 and the pending order 2 are in the same direction as the position, both need to increase the Margin occupation, which can be obtained according to the calculation (ignoring the handling fee)
    The margin occupation of pending order 1 is 300*50000*0.0001*1%=15 USD, and the margin occupation of pending order 2 is 500*49000*0.0001*1%=24.5 USD.
    When the market fluctuates violently and the total initial margin ratio is <100%, the system will trigger automatic cancellation. Since the pending order 1 occupies less margin and has less impact on the user's expected transaction, the system will give priority to canceling the pending order 1. The total initial margin rate is still <100%, and pending order 2 and pending order 3 will continue to be canceled.
    Forced Repayment
    When the total maintenance margin ratio is ≤110% , the system will use the existing funds to automatically repay the loan to reduce the occupation of the margin by the loan, but only the loaned part of the asset will be repaid in the same coin.
    Example
    User holds 1BTC and 3000USDT, borrows 1.5BTC and 1 ETH, total assets are 2.5BTC + 3000USDT + 1 ETH, user sells 1 ETH, total maintenance margin ratio ≤110%, it trigger forced repayment due to market price fluctuation, it will automatically use the BTC Balance to repay 1.5 BTC. Since there is no balance, in ETH, the ETH related debt will not be repaid.
    Forced Liquidation
    When the total maintenance margin rate ≤100% , the system will trigger the forced liquidation process. The specific operations are as follows:
    Firstly, all Cross Margin and contract orders will be canceled, and need to check in real time whether the total maintenance margin of the account is > 100% or not, if it is, the position reduction process will be terminated;
    For USD perpetual contracts in a Portfolio Margin Account, according to the size of the loss, the losing positions will be closed in order, and the positions with the larger loss will be closed first. Then, according to the size of the profit, the profitable positions will be closed in order, and the positions with the smaller profit will be closed first, need to check in real time whether the total maintenance Margin of the account is > 100% or not. If it is, the process of reducing the position will be terminated;
    Cross Margin, according to the loan amount, the coin with the larger loan amount is automatically closed first, and then the existing assets are sold according to the margin adjustment factor, and coins with larger margin factor and less discount will be sold first to reduce the occupation of margin by lending, and checks in real time whether the total maintenance margin of the account is> 100% or not. If it is, the process of reducing the position will be terminated.
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