In a joint effort between London-based platforms Bitcoin (BTC) and Ripple (XRP), Crypto Facilities announced the launch of the new Instant Margining System, which was established on April 20th, 2018. The goal of the new system is to increase speed, promote stability, and encourage a user-friendly platform to trade on. Even though it is still just as straightforward as existing systems, investors will find a few differences, which currently only has an initial margin (IM) and maintenance margin (MM).
The initial margin is required to open any new position, and it will be assigned a portfolio value. Presently, it is 2% for XBTUSD Futures and 5% for XRPUSD and XRPXBT Futures. To handle any risks safely, the portfolio value needs to remain higher than the initial margin. If it falls below, the system will automatically cancel any open orders that would bring it down. The only way to reestablish any open positions is to bring up the total portfolio value with sufficient funds. If the user can’t add funds, they can also choose to eliminate some current positions on their system.
The maintenance margin is required for maintaining any open positions on the portfolio. Much like the initial margin, the goal is to protect the positions already within the portfolio. However, rather than cancelling open orders, the system will automatically begin liquidation if the value falls below this margin. The value of the maintenance margin is half of the initial margin, so this action will only take place after the user already has cancelled the open orders to preserve the account.
Thes two margins are critical for handling the credit risk for each margin account. By keeping funds available at all times, neither of these margins should impact the user’s account. However, with the safeguards in place, the user can manage their risks safely and efficiently without substantial loss.
Along with these margins and protective measures, the new Crypto Facilities system also:
- Recalculates the mark prices, margins, and PnL multiple times each second
- Uses CME CF technology to calculate indices once per second
- Displays the effective leverage and return on equity on the Open Positions tab
- Can use two clicks to close a position at the current market price
- Provide thorough statistics on any liquidation or termination, which is sent via email
- Identify liquidations through the public trades history
Investors and ocnsumers can find out more details about Crypto Facilities through https://www.cryptofacilities.com/ or by emailing [email protected]