Perpetual contracts are margin trading contracts, where traders only need to deposit a small amount of funds as collateral based on the contract price and a certain ratio to complete the contract transaction. This collateral is called the contract margin.

Perpetual contracts have Initial Margin (IM) and maintenance margin (MM).

### Initial Margin（IM）

IM is the minimum margin required to open a position, including the opening order IM and the holding IM.

### Maintenance Margin(MM)

MM is the minimum margin required to maintain a position. If the account margin falls below the maintenance margin level, the position will be liquidated.

### The calculation of perpetual contract margin: long or short perpetual contracts

Opening order IM = order amount * order price/leverage

Holding IM = holding amount * average holding price/leverage

Holding MM = holding amount * (average holding price * minimum MM rate + liquidation fee rate * mark price)

For IM, under SM, the leverage used by the trader is inversely proportional to the initial margin required to open a position. The higher the leverage, the less initial margin is required.

Example:

A trader places an order with an order amount of 1 BTC, an order price of $20,000, and a leverage of 5x.

The required IM for the opening order = 1 * 20,000 / 5 = $4,000.

For MM, the minimum MM rate is calculated based on the different position value levels of the account. Similar to the progressive tax rate, the corresponding maintenance margin rate is set for each level of position value, and the maintenance margin is calculated separately for each level. The required maintenance margin for each level is added up to obtain the total maintenance margin. The "excess" in the progressive tax rate refers to the part that exceeds a certain level, which is only taxed at a higher rate for the excess part. Similarly, the maintenance margin for the excess part is calculated at a higher margin rate.

Taking BTC-Perp perpetual contract as an example, its contract gradient is set as:

Level |
Position value (USD Nominal Value) |
Max Leverage |
MM Rate |
Quick calculation amount of MM |

1 | 0 - 50,000 | 50x | 0.40% | 0 |

2 | 50,000 - 250,000 | 25x | 0.50% | 50 |

3 | 250,000 - 1,000,000 | 20x | 1.00% | 1,300 |

4 | 1,000,000 - 7,500,000 | 10x | 2.50% | 16,300 |

5 | 7,500,000 - 40,000,000 | 6x | 5.00% | 203,800 |

6 | 40,000,000 - 100,000,000 | 5x | 10.00% | 2,203,800 |

7 | 100,000,000 - 200,000,000 | 4x | 12.50% | 4,703,800 |

8 | 200,000,000 - 400,000,000 | 3x | 15.00% | 9,703,800 |

9 | 400,000,000 - 600,000,000 | 2x | 25.00% | 49,703,800 |

10 | 600,000,000 - 1,000,000,000 | 1x | 50.00% | 199,703,800 |

- Maintenance Margin = Position Nominal Value * MM Rate - Quick Calculation Amount of MM + Liquidation Fee
- Position Nominal Value = Position Amount * Mark Price
- Liquidation Fee = Futures Liquidation Fee Rate * Futures Mark Price * Position Amount

Taking the BTC-Perp contract as an example, its contract gradient is set as follows:

For instance, if an account's BTC-Prep position nominal value is $10,000, in the first level, the maximum available leverage ratio is 50x, and the MM rate is 0.4%, the required MM would be 10,000*0.40% - 0 = $40.

If the position nominal value increases to $60,000 in the second level, with the excess part over the first level using a margin rate of 0.50% and the first level still using a margin rate of 0.40%, the required MM would be (50,000*0.40% - 0)+(60,000-50,000)* 0.50% - 50 =200+50= $250

Coincall's use of a graded margin system and progressive excess approach can significantly reduce MM usage and effectively increase user fund utilization rates.

Note: the liquidation fee is not considered here.

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