How to calculate MEXC leverage fee

A Comprehensive Guide to Calculating Leverage Fees on MEXC

MEXC Global, a leading cryptocurrency exchange, provides traders with the ability to utilize leverage in their trades. Leverage allows traders to amplify their exposure to an underlying asset, potentially increasing their profits but also their risks. Understanding how to calculate leverage fees is crucial for traders to effectively manage their trading strategies.

Steps to Calculate Leverage Fees on MEXC

1. Determine the Trade Amount:

• The first step involves identifying the total trade amount, which refers to the notional value of the leveraged position. This is calculated by multiplying the underlying asset's price by the leverage applied.
• For example, if you buy 10,000 USDT worth of BTC with 10x leverage, the trade amount would be $100,000.

2. Calculate the Daily Interest Rate:

• The next step involves determining the daily interest rate charged by MEXC for the leveraged trade. This rate varies depending on the trading pair, leverage level, and market conditions.
• The daily interest rate is expressed as a percentage and can be found on MEXC's website or mobile app under the "Margin" tab.
• For instance, if the daily interest rate for 10x leverage on BTC/USDT is 0.03%, the daily interest charge would be $3 (0.03% * $100,000).

3. Compute the Leverage Period:

• The leverage period refers to the duration for which the leveraged trade is held open. This can range from a few hours to several days or even months.
• It's important to note that the interest charged is calculated on a daily basis, regardless of the actual duration of the trade.

4. Multiply Interest Rate by Leverage Period:

• To calculate the leverage fee, the daily interest rate is multiplied by the leverage period. The result is the total interest charge incurred for holding the leveraged position during the specified period.
• Continuing with the earlier example, if the leverage period is 3 days, the leverage fee would be $9 (3 days * $3).

5. Adjust for Margin Split:

• In certain cases, MEXC implements a margin split mechanism, which affects the leverage fee calculation.
• If the margin split is 50%, half of the trade amount (i.e., $50,000 in our example) is used to determine the leverage fee, resulting in a revised interest charge of $4.50 ($9 * 50%).

6. Convert Leverage Fee to Asset Currency:

• The leverage fee is usually calculated in USDT on MEXC.
• If traders need to convert the fee to the asset currency being traded, they can do so based on the current market price.

Example:

• Let's assume we buy 10,000 USDT worth of BTC with 10x leverage, the daily interest rate is 0.03%, and the leverage period is 3 days.
• Trade amount: $100,000
• Daily interest charge: $3
• Leverage fee: $9
• Margin split (if applicable): 50%
• Revised leverage fee: $4.50
• **Assuming BTC price is $25,000:** Leverage fee in BTC = $4.50 / $25,000 = 0.00018 BTC

By following these steps, traders can accurately calculate leverage fees on MEXC, allowing them to plan their trades more effectively and minimize unexpected costs.