How to calculate AscendEX leverage fee

AscendEX's leverage fee calculation involves multiplying the leverage multiplier, base trading fee, position value, and duration, allowing traders to determine the cost for enhanced trading potential but also heightened risk.

Nov 26, 2024 at 08:44 pm

How to Calculate AscendEX Leverage Fee

1. Understanding Leverage

Leverage allows traders to amplify their potential profits by borrowing funds from the exchange. However, it also increases the risk of losses. AscendEX offers leverage options of up to 125x, depending on the asset and market conditions.

2. Calculating the Leverage Fee

AscendEX charges a leverage fee for using its leveraged trading features. The fee varies based on the leverage used, the asset being traded, and the duration of the trade.

Formula for Leverage Fee Calculation:

Leverage Fee = Leverage Multiplier x Base Trading Fee x Position Value x Duration

3. Determining Leverage Multiplier

The leverage multiplier is the amount of leverage being used in the trade. For example, a leverage of 10x indicates that the trader is borrowing 9x their initial capital.

4. Identifying Base Trading Fee

The base trading fee is the standard fee charged by AscendEX for executing trades. This fee varies by asset and is typically a small percentage of the trade value.

5. Calculating Position Value

The position value is the total value of the asset being traded. It is calculated by multiplying the current market price of the asset by the amount being traded.

6. Determining Duration

The duration is the length of time the leveraged position is held open. The leverage fee is charged on an hourly basis.

Example:

Suppose a trader opens a leveraged position of $1,000 in Bitcoin with a leverage of 10x. The base trading fee for Bitcoin is 0.2%. The trader holds the position for 4 hours.

Leverage Multiplier: 10
Base Trading Fee: 0.2% (0.002)
Position Value: $1,000
Duration: 4 hours

Leverage Fee Calculation:

Leverage Fee = 10 x 0.002 x $1,000 x 4 = $0.80

Additional Considerations:

• The leverage fee is calculated and charged on an hourly basis, even if the position is held for less than an hour.
• The leverage fee is subject to change based on market conditions and exchange policy updates.
• Traders should carefully consider the risks associated with leverage trading and only use leverage when they fully understand how it works.