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2025-05-03T08:10:52
An automatic margin call is an essential feature in futures trading that helps maintain the stability of trading positions. When the margin rate falls below a predetermined level, this feature automatically allocates additional funds from the investor's account. This mechanism helps prevent liquidation due to inadequate margin, enhancing risk management and offering investors more flexibility.
Futures trading often involves high price volatility. If investors delay adding margin, they risk liquidation. The automatic margin call triggers when the margin rate dips below a certain threshold, adding funds to help mitigate losses. For instance, during unexpected market shifts, this feature can quickly activate, giving investors extra time to adjust their strategies.
Traditional trading requires constant monitoring of margins, which can be cumbersome and lead to losses from delays. Automatic margin calls allow investors to concentrate on market analysis rather than margin management, enhancing their overall trading experience. This feature enables better handling of market fluctuations without the stress of constant oversight.
By automatically replenishing the margin, the automatic margin call feature significantly lowers the risk of liquidation losses. This stability allows investors to trade more rationally, avoiding poor decisions driven by emotional reactions.
To enable automatic margin call, go to Trade > Futures > Positions (isolated margin) > Margin Adjustment and activate. After activation, the system will automatically adjust the margin based on your specified parameters. Investors should fully understand the associated risks and benefits before enabling this feature.
Investors can set the amount of margin to be added during a call. Generally, higher amounts improve risk control but may reduce trading flexibility. It's crucial to find a balance that aligns with individual trading strategies and risk tolerance.
While the automatic margin call feature helps manage risks, investors still need to monitor margin rate changes closely. Sudden drops may hinder the feature’s effectiveness, possibly leading to liquidation. Utilizing SorooshX's trading tools and alerts can help investors stay informed and adjust their strategies accordingly.
- When the reasonable mark price nears the estimated liquidation price, available funds are first redirected to the position's margin.
- This feature is only offered in isolated margin mode.
Once enabled, if the mark price approaches the liquidation threshold, available funds will automatically be transferred to maintain the margin. If the funds are insufficient, the remaining balance will still be added, but if liquidation conditions persist, the position may be partially or fully liquidated. The feature resets after a full liquidation, requiring reactivation for future positions.
An investor has 600 USDT available and opens a long position of 0.1 BTC with 10X leverage, needing 272.495 USDT as initial margin. If the liquidation price is 24,637.9 USDT, an automatic margin call activates when the mark price drops below this level. An additional 272.495 USDT is added to the position’s margin, modifying the available balance and adjusting the liquidation price accordingly.
Setting appropriate margin call parameters is vital. Poor configurations can lead to insufficient risk management or hinder trading flexibility.
While the feature reduces risks, it doesn’t eliminate them. Investors must stay updated on market trends and adapt their strategies to lessen potential losses.
Automatic margin call is a risk management tool but does not guarantee the avoidance of trading losses. Investors should evaluate the feature’s risks and benefits thoroughly to make informed decisions.
The automatic margin call feature in SorooshX offers a valuable way to manage risks in futures trading. By using this tool effectively and customizing it to their needs, investors can enhance their trading flexibility and strengthen their risk management. However, remaining vigilant about market conditions and adjusting strategies promptly is crucial to avoid losses during volatile periods.
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