Bitget Futures: Introduction to Automatic Margin Call

1. What is Automatic Margin Call?

Automatic margin call is a key feature in futures trading that ensures the stability of positions by automatically allocating additional margin from an investor's account when the margin rate drops below a certain level. This helps prevent liquidation due to insufficient margin and enhances risk management, providing investors with greater flexibility.

2. What are the advantages of Automatic Margin Call in Bitget futures trading?

1. Timely loss protection

￮ Futures trading is known for its significant price volatility. If investors fail to add margin promptly, they may face liquidation risks. The automatic margin call feature activates when the margin rate falls below a specific threshold and adds margin to mitigate losses from delayed manual intervention.

For example, during a sudden market reversal that puts a position at significant risk of liquidation, the automatic margin call can activate swiftly, providing investors with additional time to adjust their strategies and avoid potential losses.

2. Enhanced trading flexibility

￮ Traditional futures trading requires investors to constantly monitor their margin and manually add funds, which can be burdensome and lead to potential losses due to delays. With automatic margin call, investors can focus on market analysis and strategy without worrying about margin management, improving overall trading flexibility. This feature allows investors to handle market volatility more effectively without the added stress of constantly monitoring and adjusting their margin.

3. Reduced trading risks

￮ Automatic margin call can effectively reduce trading risks and avoid liquidation losses. By automatically replenishing the margin, investors can maintain a certain degree of stability in their positions and reduce losses due to market volatility.

￮ The feature also allows investors to trade more rationally and avoid making poor decisions based on emotional swings.

3. How to use Automatic Margin Call in Bitget futures trading?

1. Enabling the feature

￮ Navigate to Futures > Positions (isolated margin) > Margin Adjustment (click or tap "+") to enable automatic margin call on Bitget. Once enabled, the system will automatically add margin based on the parameters set by the investor.

￮ Before enabling this feature, investors should thoroughly understand its risks and benefits and set it up based on their risk tolerance and trading strategy.

2. Configuring margin call parameters

￮ Investors can customize the margin amount to increase. Generally, higher amounts provide better risk control but reduce trading flexibility.

￮ Investors should set reasonable margin call parameters based on their trading strategies and risk tolerance to strike a balance between risk control and trading flexibility.

3. Monitoring margin rate

￮ While automatic margin call can help mitigate trading risks, investors must still monitor margin rate fluctuations closely. Sudden drops in the margin rate may prevent the feature from responding promptly, potentially resulting in liquidation.

￮ Investors can leverage Bitget's trading tools and risk alerts to monitor margin rate fluctuations and adapt their strategies as needed.

Key points to note about the Automatic Margin Call feature in Bitget futures trading:

• When the reasonable mark price approaches the estimated liquidation price, available funds in your account are first transferred to the margin of that position.

• This feature is exclusively available in isolated margin mode.

Once the automatic margin call feature is enabled, if the reasonable mark price nears the estimated liquidation price of a position, available funds in your account will automatically transfer to the position margin. This ensures the actual margin rate aligns with the rate set by the user when configuring leverage. If the available funds in the futures account are insufficient to fully meet the margin call, the remaining funds will automatically be added to the position margin. However, if liquidation conditions persist, the position may be partially or fully liquidated. The automatic margin call feature resets when a position is fully liquidated. You will need to enable it again the next time you open a position. Actual margin rate = (position margin + unrealized PnL) ÷ position value.

Example:

Suppose an investor has an available balance of 600 USDT, with the current BTC price at 27,249.5 USDT. The investor opens a long position of 0.1 BTCUSDT using 10X leverage, requiring an initial margin of 272.495 USDT. The liquidation price is calculated to be 24,637.9 USDT, leaving 327.505 USDT as the available balance.

When the mark price falls below the liquidation price of 24,637.9 USDT, an automatic margin call is triggered to prevent the position from being liquidated. An additional 272.495 USDT is added to the position's margin, reducing the available balance to 55.01 USDT. Consequently, the new liquidation price is 21,900.4 USDT, and the initial margin for this position becomes 544.99 USDT.

If the BTCUSDT price continues to decline and falls below 21,900.4 USDT, the automatic margin call is triggered again. The remaining 55.01 USDT in the available balance is added to the position's margin, further lowering the liquidation price to 21,347.7 USDT.

If the account balance is exhausted and the price drops below 21,347.7 USDT, the position will be fully liquidated, as no further automatic margin calls can be executed.

4. Important considerations

1. Configure parameters appropriately

￮ Investors should set reasonable parameters for the automatic margin call feature based on their risk tolerance and trading strategy. Poorly configured parameters may lead to inadequate risk control or reduced trading flexibility.

2. Monitor market conditions

￮ While the automatic margin call feature can help reduce trading risks, it cannot eliminate them entirely. Investors must stay aware of market trends and adjust their strategies to minimize potential losses caused by market volatility.

3. Understand the risks

￮ Automatic margin call serves as a risk management tool but does not guarantee that trading losses can be completely avoided. Investors must assess the risks and benefits of the feature and make informed decisions aligned with their risk tolerance.

In conclusion, Bitget's automatic margin call feature is a valuable tool for managing risks in futures trading. By leveraging this feature appropriately and tailoring it to their needs, investors can enhance trading flexibility and strengthen risk management. However, staying vigilant about market dynamics and making timely adjustments to strategies remain critical for avoiding losses during market fluctuations.