Risk indicator Risk Ratio you must understand🐈⬛
This part is quite important, please be sure to read it. Risk Ratio refers to the risk index of your current Margin Wallet, which ranges from 1.0 (dangerous) to 999 (safe).
His formula is actually:
Margin Level (Risk Ratio) = Total Asset Value / (Total Borrowed + Total Accrued Interest)
Risk indicator = total account equity / (debt + interest)
for example:
1. If you transfer 2000 U into the Margin Wallet first, and there is no borrowing at this time, and the Debt is 0, then your Margin Level is 999.
2. If you borrow 1000 U and there is no interest, then your Margin Level is (1000U + 2000U) / 1000U = 3.0
3. Next, you use LTC 300U to buy 10 LTC for 3000U. At this time, the LTC price has not changed, so your Margin Level is still ~= 3.0 (there will be some deviation after deducting the handling fee)
4. But then LTC dropped from 300 to 290. That is, your total net worth changes from 10 LTC* 300 to 10 LTC* 290 = 2900U. At this time, the Margin Level becomes 2900U / (1000U + 0 Interest) = 2.9
5. At this time, you think you may need to stop losses and control risks, so you repay 200U. At this time, the debt is 800U. So the Margin Level has increased by 2700U / 800U = 3.375.
Start trading here➡️$BTC $ETH $BNB
Currency Cat 🐈⬛
This part is quite important, please be sure to read it. Risk Ratio refers to the risk index of your current Margin Wallet, which ranges from 1.0 (dangerous) to 999 (safe).
His formula is actually:
Margin Level (Risk Ratio) = Total Asset Value / (Total Borrowed + Total Accrued Interest)
Risk indicator = total account equity / (debt + interest)
for example:
1. If you transfer 2000 U into the Margin Wallet first, and there is no borrowing at this time, and the Debt is 0, then your Margin Level is 999.
2. If you borrow 1000 U and there is no interest, then your Margin Level is (1000U + 2000U) / 1000U = 3.0
3. Next, you use LTC 300U to buy 10 LTC for 3000U. At this time, the LTC price has not changed, so your Margin Level is still ~= 3.0 (there will be some deviation after deducting the handling fee)
4. But then LTC dropped from 300 to 290. That is, your total net worth changes from 10 LTC* 300 to 10 LTC* 290 = 2900U. At this time, the Margin Level becomes 2900U / (1000U + 0 Interest) = 2.9
5. At this time, you think you may need to stop losses and control risks, so you repay 200U. At this time, the debt is 800U. So the Margin Level has increased by 2700U / 800U = 3.375.
Start trading here➡️$BTC $ETH $BNB
Currency Cat 🐈⬛