Understanding margin and margin requirements

Important: Margin trading is high risk and only available to eligible professional investors in select locations. Margin trading is not available in Hong Kong or to Hong Kong users.

Warning: Margin trading is a high risk activity. Please read carefully the Risk Warnings and Appendix 2, Terms for Lending Services on Bullish.com.

Unified Trading Accounts and Risk Management

Bullish’s Unified Trading Accounts combine best-in-class cross-collateralization with a single account that provides a simple interface for spot trading, margin trading, and for trading perpetual markets, all with varying leverages.


Margin can be considered as your “margin of safety” regarding leveraged trading. A larger value is desirable as it results in an increased ability to withstand large price movements before liquidation.

Your account’s Margin is equal to your account’s collateral value minus the value of its debts, both measured in USD.

Margin = Collateral Value - Debt

The Collateral explainer article has more details for how we determine this value. It incorporates your idle balances, assets locked in open orders and unsettled profits or losses.

Debt is simply the current valuation of the assets you have borrowed, plus any residual unsettled losses that cannot be offset against your available balances. See Impact of perpetual positions' unsettled profits or losses at the end of this article for more information about unsettled losses.

Margin Requirements

The multiple Margin Requirements correspond to varying degrees of leverage. We constantly recalculate and compare your account’s Margin to its various Margin Requirements to determine its status, which is also displayed as a Health indicator. The status also determines whether any actions need to be taken on your behalf. For instance, when your Margin falls below the Warning Margin Requirement we update the status to Caution and send a Margin Call notification.

To view the current live values of the margin requirements, visit our Reference page.

Calculating Margin Requirements for a trading account

Your trading account’s Margin Requirements are computed from the combination of the account’s

  • Assets borrowed through the Bullish Margin service

  • Perpetual positions

  • Perpetual limit orders

  • Perpetual AMM Instructions

  • Unsettled perpetual losses

The combination of Margin Requirement purpose (e.g. Initial Margin) and product being traded (e.g. Perpetuals) determines a specific leverage value to use in the Simple Margin Requirement formula below:

Simple Margin Requirement = USD Notional Value / (Leverage - 1)

For example, a spot margin trade with a notional value of US$100 at leverage 3x would have a Margin Requirement of US$100 / (3 - 1) = US$50. Similarly, a long or short perpetual market position with a notional value of US$100 at leverage 7x would have a Margin Requirement of US$100 / (7 - 1) ≈ US$17.

Calculating total Margin Requirement

To determine a specific Margin Requirement for the trading account we add up the Spot Margin Requirements (using that requirement’s spot leverage) and the Perpetual Margin Requirements across all contracts (using that requirement’s perpetuals leverage).

Calculating the Spot Margin Requirement

The spot Margin Requirement is the sum of the individual Simple Margin Requirements for everything that the account has borrowed. This includes any potential borrows from unsettled P&L, explained in more detail later on this page.

Calculating the Perpetual Margin Requirement 

To calculate the Margin Requirement for perpetual contracts, we consider both bullish (up only) and bearish (down only) market scenarios, and take the largest Simple Margin Requirement of each scenario.

In the bullish scenario, we calculate a net quantity by subtracting short order quantities and AMM Instruction short quantities from the current position. We then price this net quantity using the highest value among the Mark Price, limit order prices, and AMM Instruction upper bound prices.

In the bearish scenario, we calculate a net quantity by adding long order quantities and AMM Instruction long quantities to the current position. We price this net quantity using the current Mark Price.

We compare the absolute values of these two notional values and choose the larger one as the worst-case perpetuals position notional. We convert this notional value to USD for use in the Simple Margin Requirement formula (so we divide it by (leverage - 1)) to determine the overall Margin Requirement for that contract.

By summing up the Margin Requirements for all perpetual contracts, we can determine the final Perpetual Margin Requirement for the trading account at that time.

Impact of perpetual positions' unsettled profits or losses

Each perpetual contract in a trading account has an "unsettled P&L" that represents the combined profits or losses from market price movements, realized trading profits or losses, and Funding Amounts since the last settlement. This unsettled P&L can be netted across contracts by their settlement currency, resulting in a single unsettled profit or loss for the entire trading account per settlement asset.

Then we consider each of the settlement assets and their net unsettled P&L. Unsettled profits will increase the account’s collateral value as if they have been added to the available balance for that settlement asset, thereby increasing Margin. Conversely, net unsettled losses will decrease the available balance for that settlement asset by the available amount, decreasing Margin. Further, if the available balance is still insufficient to cover the losses, it will act like a borrow of the settlement asset for the remaining amount, thus both decreasing Margin and increasing the Margin Requirement.

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