Understanding margin and margin requirements

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

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 the current valuation of the assets you have borrowed, plus outstanding interest on such amounts, plus outstanding fees and expenses associated with the account (including amounts incurred to recover amounts owed) 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 with regard to your account. 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

• Derivative contracts

• Perpetual contract limit orders

• Perpetual AMM Instructions

• Unsettled perpetual profits and losses

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). Using Bullish Portfolio Margining, the total margin requirement is calculated as the sum of margin requirements of all underlying assets across your trading account’s portfolio.

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 the Collateral and therefore Margin. Further, if the available balance is insufficient to cover the full unsettled loss, the residual loss is treated as if it was a borrow of the settlement asset for the remaining amount, further decreasing Margin and additionally increasing the Margin Requirement.