What is cross margin
Cross Margin uses all of a user’s wallet balance to prevent liquidation. When the equity is lower than the maintenance margin, the position will be liquidated. In the event of liquidation, the trader will lose all his/her equity. Click here for the Cross Margin liquidation formula.
Can trader change leverage under cross margin mode? How to calculate initial margin and maintenance margin under cross margin mode?
Under cross margin mode, trader cannot change the leverage. Initial margin is calculated using the maximum leverage allowed under the current risk limit level. For example: For BTCUSD perpetual contract, under the lowest risk level, the maximum allowed leverage is 100x. The initial margin to hold position under this risk level is thus 1/100 of the position value, which means the system will use 100x leverage to calculate the maximum quantity of contract that can be opened.
The calculation of maintenance margin is the same for cross margin mode and isolated margin mode. i.e. maintenance margin = position value * maintenance margin rate
What is effective leverage? How to calculate the effective leverage of the position?
The higher the effective leverage, the higher the risk of liquidation and the nearer the liquidation price to entry price. Unlike isolated margin mode where trader can adjust the leverage, under cross margin mode, the effective leverage is calculated based on trader’s position value as compared to the maximum possible loss of the position.
Effective leverage = position value / (available margin + position margin)
How to calculate the ROI under cross margin mode?
The ROI calculation under cross margin mode and isolated margin mode is the same.
The displayed unrealized P&L (%) is calculated against the position margin of the corresponding position.
Unrealized P&L (%) = Unrealized P&L/Initial Margin
Initial Margin = Position Value/Leverage
Fee to close the position = (Quantity of contract/Bankruptcy price) * Taker Fee
Unrealized P&L (Long position) = Quantity of contract * (1/entry price – 1/exit price)
At 8,000 USD/BTC, a trader bought 10,000 BTCUSD contracts. When Last traded price (LTP) rises to 8,100 USD/BTC:
Unrealized P&L = 10,000(1/8000- 1/8100) = 0.01543209BTC
Initial Margin = （10000/8000）/100 = 0.0125BTC
How to change between cross margin mode and isolated margin mode?
The default leverage mode on Bybit is cross margin mode. Trader can change it at the order placement column by moving the black dot to the desired leverage or Cross.