What Is the Default Leverage of My MT4 Account?
How Is Margin Required Calculated on MT4?
How Is Free Margin Calculated on MT4?
What Is Tiered Margin and How Does It Apply to MT4?
How is Tiered Margin Calculated?
Leverage
What Is Leverage?
Leverage in crypto derivatives trading is a useful financial tool that allows traders to increase their market exposure beyond the initial investment (deposit). This means that a trader can enter a position for $100,000 worth of BTC and only need $1000 in a hundred-to-one leverage scenario. Traders should also be aware that there is a chance that their gains or losses are magnified as a result of increased leverage.
Bybit's MT4 offers users to trade up to a leverage of 100:1 only on BTCUSDT pairs. This means that traders can gain exposure to a notional value of up to a hundred times more than the deposit/margin required to fund the trade.
What Is the Default Leverage of My MT4 Account?
MT4 applies a different leverage to each symbol. The 100:1 leverage only applies to BTCUSDT on Tier 1. For the full leverage and margin requirements of each pair, kindly refer to the table list under MT4 Tiered Margin.
Users are not allowed to change their leverage for MT4 accounts.
Margin
What Is Margin?
To ensure you can open any new positions or cover the losses on your trades, Bybit requires you to put up collateral. This collateral is typically referred to as margin.
Although there is no minimum margin deposit required to open an MT4 account with Bybit, the margin available in your account will limit the size of the positions you can open, and the amount of losses you can sustain before a liquidation (margin closeout) event occurs.
How Is Margin Required Calculated on MT4?
Margin Required = Contract Size × Open Price × Margin %
For example, the leverage ratio for BTCUSDT is 100:1, or 1%. Therefore, to open a new position of 5 units for BTCUSDT at 50,000, the following calculation would be applied.
Note: MT4 uses Open Price for margin requirements consideration. This does not change with price fluctuations after your position has been opened.
Margin Required = Trade Size × Price/Leverage Ratio
Margin Required = 5 × 50,000/100 = 2,500
How Is Free Margin Calculated on MT4?
Free Margin refers to the amount of available margin you have available on MT4 to open any new positions.
Depending on the condition, the formula would differ slightly.
Scenario 1: Unrealized Loss (Unhedged Position)
Free Margin = Equity − Margin
Scenario 2: Unrealized Profit (Unhedged Position)
Free Margin = Balance − Margin
Scenario 3: Unrealized Profit (Hedged Position)
Free Margin = Balance − Margin
Scenario 4: Unrealized Loss (Hedged Position)
Free Margin = Equity − Margin
|
Condition |
Formula |
|
Unrealized Loss (Unhedged) |
Free Margin = Equity − Margin |
|
Unrealized Profit (Unhedged) |
Free Margin = Balance − Margin |
|
Unrealized Profit (Hedged Position) |
Free Margin = Balance − Margin |
|
Unrealized Loss (Hedged Position) |
Free Margin = Equity − Margin |
What Is Tiered Margin and How Does It Apply to MT4?
Bybit’s MT4 applies a tiered margin concept that requires traders to put up increased margin requirements should the open positions held for a certain instrument exceed a certain limit. Tiered Margin is only applicable on a per instrument basis. This means that if traders hold open positions across multiple instruments, the margin will be calculated separately for each instrument.
For more information on the volume tiers and the respective margin requirements, please refer to the Tiered Margin Table under MT4 Specifications
How is Tiered Margin Calculated?
Example
Trader decides to place the following trades throughout the day:
- Long BTCUSDT with Quantity — 5 priced at 50,000
- Long BTCUSDT with Quantity — 15 priced at 50,000
- Long BTCUSDT with Quantity — 20 priced at 80,000
|
Order # |
Tier |
Entry Price |
Quantity |
Margin Rates (%) |
Margin Used |
Accumulated Margin |
Accumulated Position Value |
|
1 |
Tier 1 |
50,000 |
5 |
1% |
2,500 |
2,500 |
250,000 |
|
2 |
Tier 1 |
50,000 |
5 |
1% |
2,500 |
5,000 |
500,000 |
|
Tier 2 |
50,000 |
10 |
2% |
10,000 |
15,000 |
1,000,000 |
|
|
3 |
Tier 3 |
80,000 |
12.5 |
3% |
30,000 |
45,000 |
2,000,000 |
|
Tier 4 |
80,000 |
7.5 |
4% |
24,000 |
69,000 |
2,600,000 |
- Long BTCUSDT with Quantity — 5 priced at 50,000
Margin Rates remain at 1%, and on the first tier.
|
Position Size(BTC) |
0.5m |
1m |
2m |
3m |
4m |
5m |
6m |
7m |
8m |
9m |
10m |
|
Margin Requirement |
1% |
2% |
3% |
4% |
6% |
8% |
10% |
12% |
14% |
16% |
18% |
Accumulated Position Value
= Entry Price × Quantity
= 50,000 × 5
= 250,000
Total Margin Requirements
= Margin Rates (%) × Quantity × Entry Price
= 1% × 5 × 50,000
= 2,500
- Long BTCUSDT with Quantity — 15 priced at 50,000
Margin Rates increase to Tier 2, with MT4 now using a blended margin to calculate total margin requirements from Tiers 1 and 2.
|
Position Size(BTC) |
0.5m |
1m |
2m |
3m |
4m |
5m |
6m |
7m |
8m |
9m |
10m |
|
Margin Requirement |
1% |
2% |
3% |
4% |
6% |
8% |
10% |
12% |
14% |
16% |
18% |
Accumulated Position Value (Sum of Total Position Value)
= Position Value 1 (Refer to Order #1) + Position Value 2 (Refer to Order #2)
= 250,000 + (50,000 × 15)
= 1,000,000
Total Margin Requirements
= Margin Requirements from (Tier 1 + Tier 2)
= [Tier 1 Margin Rates (%) × Quantity × Entry Price] + [Tier 2 Margin Rates (%) × Quantity × Entry Price]
= [1% × (5+5) × 50,000] + [2% × (10) × 50,000]
= 15,000
- Long BTCUSDT with Quantity — 20 priced at 80,000
Margin Rates will increase to Tier 3 and 4 with Order #3.
|
Position Size (BTC) |
0.5m |
1m |
2m |
3m |
4m |
5m |
6m |
7m |
8m |
9m |
10m |
|
Margin Requirement |
1% |
2% |
3% |
4% |
6% |
8% |
10% |
12% |
14% |
16% |
18% |
Accumulated Position Value (Sum of Total Position Value)
= Position Value 1 (Refer to Order #1) + Position Value 2 (Refer to Order #2) + Position Value 3 (Refer to Order #3)
= 250,000 + 750,000 + (80,000 × 20)
= 2,600,000
Total Margin Requirements
= Margin Requirements from (Tier 1 + Tier 2 + Tier 3 + Tier 4)
= 5,000 + 10,000 + 30,000 + 24,000
= 69,000
Hedging Margin Requirements
Hedging margins are set to the “longest leg,” so that you’ll be charged margin for the longer portion of the hedge trade and nothing for the shorter leg.
For example, you are trading BTCUSDT and have two BTCUSDT positions, originally selling a quantity of 10 and then buying a quantity of 5. In this case, you would only be charged margin for the original, larger side of the trade, the BTCUSDT short 10 positions. Assuming that the margin for selling 10 BTCUSDT is $5000 and the margin for buying 5 BTCUSDT is $2500, you would only need to provide enough margin to cover the original, larger sell position for both of the trades in this market.