How much margin is needed for BigONE contract to avoid liquidation?

To avoid liquidation on BigONE contracts, traders must maintain a minimum margin of 10% of the contract's value in their account.

Dec 03, 2024 at 12:17 am

How much margin is needed for BigONE contract to avoid liquidation?

Margin trading is a popular way to increase your potential profits in the cryptocurrency market. However, it is important to understand the risks involved before you start trading on margin. One of the most important things to know is how much margin you need to avoid liquidation.

What is Margin Trading?

Margin trading is a type of trading that allows you to borrow money from a broker to trade with. This means that you can trade with more money than you actually have in your account. However, you are also responsible for paying back the loan, plus interest.

How Much Margin Do I Need?

The amount of margin you need depends on the size of your position and the volatility of the cryptocurrency you are trading. The more volatile the cryptocurrency, the more margin you will need.

BigONE Margin Requirements

BigONE is a cryptocurrency exchange that offers margin trading. The margin requirements for BigONE contracts vary depending on the contract. However, the minimum margin requirement is usually 10%. This means that you must have at least 10% of the value of your position in your account at all times.

Example

Let's say that you want to trade a Bitcoin contract on BigONE. The current price of Bitcoin is $10,000. You want to buy a contract for 1 BTC. The contract size is 1 BTC, which means that the value of your position will be $10,000.

The minimum margin requirement for BigONE contracts is 10%. This means that you must have at least $1,000 in your account to trade this contract.

What Happens if I Get Liquidated?

If you do not have enough margin in your account to cover your losses, you will be liquidated. This means that your position will be closed and you will lose all of your invested capital.

How to Avoid Liquidation

The best way to avoid liquidation is to have a sound risk management strategy. This includes setting stop-loss orders, using limit orders, and trading with a small amount of leverage.

Here are some tips to help you avoid liquidation:

• Use stop-loss orders. A stop-loss order is an order to sell your contract when the price reaches a certain level. This can help you limit your losses if the market moves against you.
• Use limit orders. A limit order is an order to buy or sell your contract at a specific price. This can help you get a better price on your trades and avoid liquidation.
• Trade with a small amount of leverage. Leverage is a multiplier that allows you to trade with more money than you actually have in your account. However, the more leverage you use, the greater your risk of liquidation.

Conclusion

Margin trading can be a powerful tool, but it is important to understand the risks involved before you start trading. By following the tips above, you can help reduce your risk of liquidation and protect your invested capital.

Additional Resources

• [BigONE Margin Trading Guide](https://bigone.zendesk.com/hc/en-us/articles/4413771888005-BigONE-Margin-Trading-Guide)
• [Margin Trading for Beginners](https://www.binance.com/en/support/faq/what-is-margin-trading)
• [The Ultimate Guide to Margin Trading](https://www.bybit.com/en-US/academy/article/a-complete-guide-to-margin-trading)