Initial margin (also called margin cost) is the minimum amount of cryptocurrency required to open a position on BitMEX. Once the position is opened, this becomes the position margin. Position margin is calculated as entry value divided by leverage, plus unrealised PnL. Unrealised losses are deducted from position margin until only the maintenance margin remains.
The amount of initial margin required depends on two factors: the value of the position you want to open (entry value) and the leverage you select. Higher leverage reduces the initial margin requirement. For example, a $10,000 position at 10x leverage requires $1,000 in initial margin. The same position at 100x leverage requires $100.
How Is Position Margin Calculated?
Position margin is calculated using the following formula:
Position Margin = Entry Value / Leverage + Unrealised PnL
The entry value is the notional value of your position at the time it was opened. Dividing by leverage gives the base margin requirement. Unrealised PnL (profit and loss) is then added or subtracted based on the current market price.
If the position is profitable, unrealised gains increase the position margin. If the position is losing, unrealised losses reduce the position margin.