As part of our dedication to improving the trading experience for our clients, Bybit has replaced Margin Replenishment(AMR) with Cross Margin.
Let’s take a look at how Cross Margin will be used.
To accommodate the risk management needs for different users, there are two options on Bybit: Isolated Margin and Cross Margin.
Using Isolated Margin will result in the margin being placed into a position isolated from an account balance. After this, no additional margin is transferred from the account balance to the position.
This can help to minimize losses if liquidation occurs, as the maximum amount that can be lost from a liquidation is the initial margin placed into a position. It can be useful in highly leveraged positions, and can be used for making quick profits from moves in the market. However, on the flip side, you could be quickly liquidated if the market moves against what is expected.
Isolated Margin is dependent on the amount of leverage used. It can be chosen on the ‘Leverage’ panel.
Cross Margin uses all of an available balance in a user’s account to prevent liquidation. Cross Margin is the default option, and is used automatically when a position is taken without leverage.
Liquidations are a lot less likely to occur using cross margin than using isolated margin. However, if liquidation does occur, then all the user’s balance will be lost.
If for example, the account balance of a client is 1BTC:
And the client enters a 1000 contacts long position at 8000 USD using Cross Margin.
The Maintenance margin can be calculated as 1000/8000*0.5%=0.000625 BTC
That means the client can lose 1-0.000625BTC before getting liquidated.
Therefore, it is advised to use Cross Margin carefully.
It can be accessed on the top right-hand corner of the platform, as seen here.
For the details for how the Liquidation Price is calculated when using Cross Margin and Isolated Margin, please click here.
If the user has positions/orders established before the change from AMR, and did not select AMR, our system will retain the Isolated Margin setting for these trades. If the user wishes to switch to Cross Margin, the user must do so manually on the “Leverage” panel.
If the user has switched on AMR prior to the update, the system will automatically switch it to Cross Margin.