Crypto derivatives platform BitMEX is reducing the Base Maintenance margin requirement for both Bitcoin and Ethereum. But for now, it is only for a trial period. As stated in their blog,
“These changes are a part of our ongoing efforts to fine-tune our platform for an even better trading experience, and reflect users’ feedback.”
While the Base Initial Margin requirements will be unchanged, the Base Maintenance Margin will be reduced on April 17th, Friday.
For traders on the Base Risk Limit that is below 200 XBT notional for XBTUSD and 50 XBT for other contracts, this change means Initial Margin requirements remain the same while Maintenance Margin requirements will reduce and the difference between Initial Margin and Maintenance Margin will increase, as such the Liquidation Price will move further away from Average Entry Price.
As for traders above the Base Risk Limit, Initial Margin requirements will reduce as such Bankruptcy Price moves closer to Average Entry Price, and Maximum Leverage available will increase.
Reduction in Maintenance Margin requirements means Liquidation Price will move closer to Bankruptcy Price, and the amount of Maintenance Margin lost in the event of liquidation will reduce.
The difference between Initial Margin and Maintenance Margin will increase, so Liquidation Price will move further away from Average Entry Price.
This means, “insurance fund grows slower,” said popular trader with the pseudonym Lowstrife.
Another popular trader Hsaka said, “Mex decided they were sufficiently satisfied with the rate of growth of the insurance fund. Congratulations on the additional cushioning on your 100x.”