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Support CenterOperation guideRules of Margin Trading
Rules of Margin Trading
2022/03/04 20:23:17

1. General


(1) For the purpose of regulating the margin trading and margin loans of digital assets, maintaining market order, and protecting the legitimate rights and interests of users, these rules are formulated in accordance with the principles of fairness, openness, and impartiality.


(2) These Rules shall apply to Margin Loan and cross margin trading on FAMEEX. Any matter for which there is no specific provision in these Rules shall be subject to the FAMEEX Service Agreement and other relevant provisions of BinancFAMEEX.


2. Margin Loan Rules


The Maximum Amount of Single Margin Loan refers to the maximum amount of digital asset that can be borrowed by a single user for each crypto. The calculation of the Maximum Amount of Single Margin Loan will be subject to the pre-set maximum total amount of Margin Loan allowed for the user and the platform’s risk control rules.


The calculation of Maximum Margin Loan Amount as follows:

The Maximum Margin Loan Amount = (Total Assets Value - Borrowed Assets Value - Accrued Interest) X (Maximum Leverage -1) - Outstanding Margin Loan


3. Interest


(1) Users keep their assets in FAMEEX’s leverage account as a margin for margin trading.


(2) Interest-calculation Rules: Simple interest shall accrue on an hourly basis. If it is less than 1 hour, it will be counted as 1 hour. Interest is calculated once at the time of the successful advance of the relevant Margin Loan, it will be counted as 1 hour immediately after the borrowing is completed, and it will be counted as 2 hours after the next full hour.


Interest calculation:

Interest = Borrowed Amount X Hourly Interest Rate X Loan Period (in hours)


(3) If there is any outstanding interest unpaid for a long time, the Risk Ratio of the User's Margin Account may be reduced to a level below the Liquidation Line, leading to the risk of forced liquidation. From this perspective, the users are advised to pay interest regularly or deposit a sufficient balance in their margin accounts.


(4) Repayment Rule: Users can manually select the loan assets to be repaid. When selecting the repayment amount, users can choose to repay all of the amount or partial outstanding loan. The interest will be repaid first and then the principal.The system will calculate the interest based on the latest Margin Loan in the next hour. Your interest will no longer be calculated when your principal and accrued interest of a specific loan are totally settled and the status of that specific loan is changed into repaid.


Depending on what assets the user borrows and what assets must be repaid, other assets cannot be used instead. Therefore, the user must ensure that there are sufficient such assets in the margin account when repaying.


4. Margin Level


Margin level represents how much is the loan, the higher outstanding loan, the higher margin level and it comes with a higher chance of liquidation. If a user is borrowing both base currency and transaction currency under a specific trading pair. The margin level and risk ratio would be based on the larger amount of borrowed assets.

 

5. Rule of Transferring Assets from Margin Account


Users have to ensure that after transferring assets from the margin account, no matter base currency or transaction currency. The risk ratio calculated based on the margin trading acocunt’s balance is larger than the leverage level/(leverage level - 1) X 100%. For example, if there is 5X leverage level, the user’s account risk ratio must be higher than 125%.

If the maximum transferable assets amount is larger than the available assets amount, the maximum transferable assets amount would be the available amount.

 

6. Risk Control


(1) Users participating in Margin Loans may use the net assets in their Margin Accounts on FAMEEX as the Collateral, and the digital assets in any other accounts are not included in the Margin for margin trading.


(2) FAMEEX has the right to monitor the risk ratio of the Users’ Margin Account on a real-time basis, and adopt corresponding measures in response to the fluctuation of the risk level.


In these rules, the Risk Ratio of margin account = (Total Assets Value - Accrued Interest) / Borrowed Asset amount X 100%

Total Assets Value= Total Market Value of All Assets in Margin Account

Total Borrowed Amount = the current total market value of all outstanding Margin Loans in the Margin Account

Accrued Interest = the amount of each Margin Loan * the number of hours as loan time by the time of calculation * hourly interest rate - deduction/paid interest.


(3) Liquidation of Margin Account: Our system will trigger the liquidation and all assets will be liquidated to pay back the interest and loan, when the risk ratio hits the liquidation of a certain margin level. The system will send you a notification through email, SMS to inform you.


When Liquidation triggered, FAMEEX will restrict users to operate the account until all the funds are settled, and the system will cancel all the pending orders for that trading pair and convert that into specific assets to repay the loan.


(4) Liquidation: System will repay the loan and will charge the liquidation fee. All the fee will be injected into the Margin Risk Fund, which will be used to cover for any loss from bankruptcy.


User’s Outstanding Fee = Borrowed Assets + Interest - repaid Assets


(5) Liquidation Fee: When liquidation triggered, and there is still any residual value in the margin account, 8% of the value will be charged as a liquidation fee and it will go to Margin Risk Fund.


If the residual value in the margin account has both base currency and transaction currency. then the system will take both. If there is either base currency or transaction currency, then the system will take whatever it is left in the margin account.

 

Liquidation Fee Rules:

a. Transaction Currency ≥ Min. transaction quantity, will be charged a certain percentage. 8% will be charged from the account;

b. Transaction Currency<Min. transaction quantity, system will take whatever is left in the account;

c. Base Currency ≥ 5 USDT,  will be charged a certain percentage. 8% will be charged from the account;

d. Base Currency < 5 USDT, system will take whatever is left in the account.


(6) Margin Risk Fund: This is funded by the system liquidating and repaying all the outstanding loans which are left in the account and it will be charged for 8% to be injected in the fund.


All the interest repaid by the users will also be funded into the margin risk fund.

 

7. Supplementary Rules


(1) Users have to agree to the terms of FAMEEX in “Margin Trading Agreement”, in order to proceed margin trading.


(2) FAMEEX provides information release, supervision and risk control services for Margin trading and loans. The Platform does not provide any income guarantee and capital guarantee for users' margin transactions on FAMEEX. Investors should fully realize that margin trading is subject to relatively high risk and should pre-assess the possible losses, and participate voluntarily on the basis of confirming that the risks are controllable and affordable.


(3) These rules are implemented by FAMEEX and will take effect after being announced to all users. The same applies to amendments.


(4) These rules shall be interpreted by FAMEEX.


(5) These rules would be effective from 12 Oct, 2020.

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