Margin Methodology

GRVT uses Cross Margin methodology for evaluation of client account risks. It is designed to enhance capital efficiency across all types of trading strategies while maintaining our exchange’s risk profile. Cross Margin calculates margin requirements independently for each position based on its risks.

Terms and Definitions

Account Equity:

Represent the value of the account if all open positions were closed at current Mark Prices of their instruments.
Is calculated as: Balance of USDT + sum of Unrealized PnL on all open positions.

Position Initial Margin Requirement

Amount of Equity that an account must hold in order to open a specific Position

Position Maintenance Margin Requirement

Amount of Equity that an account must hold in order to maintain the currently open position.

Instrument Initial Margin Requirement

Amount of Equity that an account must hold in order to open the biggest possible position that can result from currently open position and all open orders in the given Instrument.
Example:
- Account has open position of Long 1 BTC_USDT_Perp with MarkPrice=100,000 USDT,
- Account has open BUY orders of total size 1.5 BTC of BTC_USDT_Perp
- Account has open SELL orders of total size 2.6 BTC of BTC_USDT_Perp
- Biggest possible Long position = Max(0, 1 BTC) + 1.5 BTC = 2.5 BTC.
- Biggest possible Short position = Min(0, 1 BTC) - 2.6 BTC = -2.6 BTC.
- Say Initial Margin requirement = 2% of position size (Leverage=50X)
- Biggest possible Long position Initial Margin = 2.5 * 100,000 * 2% = 5,000 USDT.
- Biggest possible Short position Initial Margin = 2.6 * 100,000 * 2% = 5,200 USDT.
- BTC_USDT_Perp Initial Margin = Max(5000 , 5200) = 5,200 USDT.

Account Initial Margin Requirement

Sum of Instrument Initial Margin Requirement across all instruments that account has open positions or open orders for.
Account Initial Margin Requirement is calculated when:
- Client sends a new order - Pre-Order check.
- Right before executing order trade on order book - Pre-Trade check.
On Pre-Order check - if Account Equity is below Account Initial Margin Requirement then GRVT rejects new client order right away
On Pre-Trade check - if Account Equity is below Account Initial Margin Requirement then GRVT cancels order back to the client before order is traded.

Account Maintenance Margin Requirement

Amount of Equity that an account must hold to maintain all its currently open positions.
Calculated as a sum of Position Maintenance Margin Requirement for all open positions of the account.
Maintenance Margin Requirement is checked periodically.
If Account Equity is below Maintenance Margin Requirement the account is liquidated (see https://help.grvt.io/en/articles/10255070-what-s-the-liquidation-process-on-grvt)

Cross Margin on Perpetuals

Depending on position's size in USDT units it falls into Margin Tier 1 to 10.

Different instruments have different size thresholds for Margin Tiers.
Each tier has its level of Initial and Maintenance Margin expressed as a % of a position size.

Margin Rates table for BTC_USDT_Perp and ETH_USDT_Perp
Note: rates are subject to change.

Position Size USDT	Initial Margin Rate	Max Leverage	Maintenance Margin Rate
0 - 100,000	2%	50X	1%
100,000.01-200,000	4%	25X	2%
200,000.01-500,000	5%	20X	2.5%
500,000.01-1,000,000	10%	10X	5%
1,000,000.01-2,000,000	20%	5X	10%
2,000,000.01-5,000,000	30%	3X	15%
5,000,000.01-10,000,000	40%	2.5X	20%
10,000,000.01-20,000,000	50%	2X	25%
20,000,000.01-50,000,000	67%	1.5X	33%
50,000,000.01-100,000,000	100%	1X	50%

Maximum Position Size for BTC_USDT_Perp and ETH_USDT_Perp is 100M USDT.

If client choses Configurable Leverage manually in UI (or sets via API) the system will use the minimum between:

1 / User Selected Leverage and
Initial Margin Rate from the table above

to calculate Initial Margin Requirements of account.

For details of Configurable Leverage see: https://help.grvt.io/en/articles/10393222-configurable-leverage

Limiting the Maximum Position Size

GRVT rejects orders or trades that can potentially open a position of size larger than Maximum Position Size for this instrument.
Given: Open Position Size is the signed size, i.e. a positive number for Long position and negative number for short positions.

Max Long position: Max(0, Open Position Size) + Size of all Open BUY Orders
Max Short position: Min(0, Open Position Size) - Size of all Open SELL Orders
Check that Max( abs(Max Long position), abs(Max Short position)) is not larger than Maximum Position Size for this instrument.

When does socialized losses happen?

What's the liquidation process on GRVT?

What is the GRVT's Insurance Fund?

What are GRVT's perpetual contract specifications?

How is configurable leverage calculated?