Understanding Margin Collateral Ratio and Margin Calculation under UTA

[Estimated Reading Time: 5 mins]

This article explains how margin collateral ratio affect your available margin, how assets are valued and used under Bitget’s Unified Trading Account (UTA), and how the platform manages order placement and liquidation risk.

Account Modes in UTA

Bitget’s UTA supports the following account modes:

In Advanced Mode, all assets across product types can be used as shared margin, and PnL can be mutually offset.

What is a Margin Collateral Ratio?

In Bitget’s Unified Trading Account (UTA), different assets are assigned specific margin collateral ratio based on their market liquidity, volatility, and risk profile. These rates determine what percentage of an asset’s USD value can be counted toward your effective margin for trading and risk control purposes.

Asset Collateral Ratio

In Advanced Mode (Unified Trading Account), assets of different cryptocurrencies can be used together as margin after being converted to their USD equivalent. However, since each cryptocurrency has different market liquidity and volatility, the platform applies collateral ratio to adjust the effective USD value of each asset to balance market risk.

You can view the latest collateral ratio here.

1. User pledges BTC and DOT as margin, with no open orders, positions, or liabilities:

• Unified account assets: 1 BTC + 500 DOT

• Current prices: BTC/USD = 50,000 USD; DOT/USD = 4 USD

• Asset collateral ratio:

  • DOT collateral ratio = 0 (not counted as margin)

  • BTC collateral ratio = 0.98 (for value between 0 and 1,000,000 USD tier)

• Effective margin = 50,000 × 1 × 0.98 + 4 × 500 × 0 = 49,000 USD

2. User pledges BTC as margin, with no open orders, positions, or liabilities:

• Unified account assets: 40 BTC

• Current price: BTC/USD = 50,000 USD

• Asset collateral ratio:

  • BTC collateral ratio for the first 1,000,000 USD tier = 0.98

  • BTC collateral ratio for the amount exceeding 1,000,000 USD tier = 0.97

• Effective margin = 1,000,000 × 0.98 + 1,000,000 × 0.97 = 1,950,000 USD

Trading Rules in Advanced Mode

In Advanced Mode (Unified Trading Account), all assets are converted into their USD-equivalent values using asset collateral ratio based on liquidity and risk. These assets collectively serve as margin collateral for all trading products, including Spot, Margin, and Futures.

When a user has insufficient balance in a certain asset during a sell order, trade execution, or when a position generates negative profit and loss, the system will automatically generate a liability for that asset. Interest is charged on the liability amount according to the asset’s borrowing tier, and the liability will occupy both initial margin and maintenance margin.

Order validation rules in Advanced Mode

Before an order can be placed, Bitget checks whether your total effective margin is greater than or equal to the total occupied margin, including the new pending order.

1. When user’s effective margin is sufficient

Example:

User A placed an order to buy 20 DOT at a price of 5 USD (order fees and interest are ignored in this example).

Effective Margin = Σ (Asset Quantity × Current USD Price × Collateral Ratio)

• Σ (Asset Position Value × Current USD Price) − Currency pair trading losses − Any preoccupied margin from open orders.

• The trading loss in a crypto-to-crypto transaction depends on the Collateral Ratio of the quoted asset.

• When buying an asset, the lower the Collateral Ratio, the greater the trading loss.

• If the Collateral Ratio is 1, no trading loss occurs.

Since the DOT Collateral Ratio is 0.5, the trading loss for this order is 20 × 5 × (1 − 0.5) = 50 USD.

• Therefore, Effective Margin = 1 × 50,000 × 1 + 100 × 1 × 1 + 20 × 5 × 0.5 = 50,150 USD

• Since the effective margin covers the required margin for this order, the order is successfully placed.

2. When user’s effective margin is sufficient, but asset quantity is insufficient

Example:

User B placed an order to buy 20 DOT at a price of 5 USD.

Effective Margin = Σ (Asset Quantity × Current USD Price × Collateral Ratio)

• Σ (Asset Position Value × Current USD Price) - Currency pair trading losses - Any preoccupied margin from open orders.

Calculation:

• BTC effective margin = 1 × 50,000 × 1 = 50,000 USD

• USDT effective margin = 100 × 1 × 1 = 100 USD

• DOT Collateral Ratio = 0.5, but no DOT balance exists, so no trading loss applies.

Required margin for this order: 20 × 5 × 0.1 = 10 USD

• Therefore, Effective Margin = 1 × 50,000 × 1 + 100 × 1 × 1 = 50,100 USD

• Since the effective margin covers the required margin for this order, the order is successfully placed.

How Margin Collateral Ratio are applied?

To calculate an asset’s USD value:

• If an asset has a direct USD index, use that index price.

• If quoted in USDT, use the platform’s USDT/USD rate.

• If quoted in USDC, use the USDC/USD index.

• If only the spot price is available, calculate using Spot price × BTC/USD index.

Note: Due to exchange rate conversions and indexing, the calculated value may differ slightly from market rates.

Asset valuation and definitions under UTA

In Advanced Mode, your account’s assets are calculated using the following key concepts:

Margin Calculation Rules in Advanced Mode

In Advanced Mode (Unified Trading Account), margin is dynamically calculated based on both borrowing and derivatives trading activities. This ensures unified risk management across Spot, Margin, and Futures products.

Initial margin calculation

Total Initial Margin = Borrowed Asset Initial Margin + Derivatives Initial Margin

1. Borrowed Asset Initial Margin: Borrowed Asset Initial Margin = Borrowed Asset Quantity × USD Price of Borrowed Asset ÷ Leverage

2. Derivatives Initial Margin

• Derivatives Initial Margin = Max(Long Position Initial Margin + Long Opening Order Initial Margin,Short Position Initial Margin + Short Opening Order Initial Margin)

• Where: Position Initial Margin = Position Quantity × Mark Price × (1 ÷ Leverage + Taker Fee Rate) × USD Price of Quote Asset Opening Order Initial Margin = Order Quantity × Order Price × (1 ÷ Leverage + Taker Fee Rate) × USD Price of Quote Asset

• Therefore: Total Initial Margin = Borrowed Asset Initial Margin + Derivatives Initial Margin

Maintenance margin calculation

Total Maintenance Margin = Borrowed Asset Maintenance Margin + Derivatives Maintenance Margin

1. Borrowed Asset Maintenance Margin

• Borrowed Asset Maintenance Margin = Borrowed Asset Quantity × USD Price of Borrowed Asset × Maintenance Margin Rate

2. Derivative Maintenance Margin

• Derivatives Maintenance Margin = Max(Long Position Maintenance Margin + Long Order Maintenance Margin, Short Position Maintenance Margin + Short Order Maintenance Margin)

• Where: Position Maintenance Margin = Position Quantity × (Maintenance Margin Rate + Taker Fee Rate) × Mark Price × USD Price of Quote Asset Order Maintenance Margin = Order Quantity × (Maintenance Margin Rate + Taker Fee Rate) × Order Price × USD Price of Quote Asset

• Therefore: Total Maintenance Margin = Borrowed Asset Maintenance Margin + Derivatives Maintenance Margin

• Note: The USD value of the margin will be converted according to your configured target fiat-to-USD exchange rate, which may cause minor deviations.

Position Rules in Advanced Mode

Cross Perpetual Mode

In Advanced Mode, perpetual contract trading supports both open/close and buy/sell position modes.

1. Open/Close Mode: Users can open and close positions explicitly, tracking long and short sides separately.

2. Buy/Sell Mode: Users can directly place buy or sell orders. The system automatically determines whether the order increases or reduces the current position.

Key Terms and Definitions

Risk Management Mechanism

The Advanced Mode (UTA) uses a two-layer risk control mechanism to ensure stable operation and prevent losses caused by insufficient margin. These mechanisms help users trade normally while avoiding full liquidation when risks rise.

1. Risk verification layers

There are two levels of risk verification:

• Level 1: Order cancellation (risk control) verification

• Level 2: Pre-reduction verification

Together, these checks ensure orders and positions are managed safely without unnecessary cancellations or liquidations.

2. Risk control order cancellation

• When an account’s risk level rises above a safe threshold but has not yet reached the pre-reduction level, the system may cancel some open orders to restore balance and prevent forced liquidation.

3. Risk control rule for cross-margin accounts in Advanced Mode:

• When Effective Margin < Used Margin, the system will cancel all perpetual contract opening orders.

• Spot and Margin trading orders are not affected by this cancellation.

Pre-reduction (pre-liquidation) verification

The forced reduction process in Advanced Mode is triggered based on the account margin ratio reaching specific thresholds.

1. When the cross-margin ratio ≥ 80%, system issues a pre-reduction warning.

• Users should take action to reduce risk. (Bitget reserves the right to adjust this parameter as needed.)

2. When the cross-margin ratio ≥ 100%, system initiates pre-reduction order cancellations according to the following rules:

• Cancel relevant open orders.

• If the margin ratio remains ≥ 100% after cancellation, the account triggers forced reduction.

Forced reduction (forced liquidation)

• Forced reduction consists of three stages.

• At each stage, positions are transferred to the liquidation engine based on the current mark price.

• A maintenance margin corresponding to the reduction quantity is charged to cover potential slippage losses. Any remaining amount will be added to Bitget’s insurance fund.

Stage 1: Hedged position reduction

• Reduce opposing long and short positions of the same contract under the open/close mode.

Stage 2: Collateral conversion

If all Stage 1 positions have been closed and the account remains unsafe:

• The system converts high-collateral ratio assets (high margin contribution) into debt assets. This both increases the effective margin and repays liabilities, freeing up occupied margin.

Stage 3: Unhedged position reduction

If all Stage 2 actions fail to restore safety:

• The system reduces remaining non-hedged positions, prioritizing those that yield the greatest risk reduction effect.

• Each reduction step lowers the risk tier by one level until the account returns to a safe state.

If all contract positions have been reduced to the lowest tier and the account still fails to recover:

• Bitget will take over the user’s account and remaining assets.

• If liquidation results in a negative balance, the insurance fund will cover the shortfall, and a liquidation compensation record will be generated in the user’s account.

Summary Table: Risk Management in Advanced Mode

FAQs

1. What is a margin Collateral Ratio?
   It’s the percentage of an asset’s USD value that counts as usable margin, adjusted for liquidity and risk.

2. Why are some assets not eligible as margin collateral?
   Assets with low liquidity or high volatility (e.g., small-cap tokens) may have a 0% Collateral Ratio for risk control.

3. Can I use multiple assets together as margin?
   Yes. In Advanced Mode, all eligible assets can be pooled together as shared margin.

4. What triggers liquidation?
   Liquidation starts when your cross-margin ratio exceeds 100% and margin cannot cover open positions.

5. What happens to my open orders during risk control?
   If Effective Margin < Used Margin, all open perpetual orders are cancelled to restore account safety.

6. What is the difference between Initial Margin and Maintenance Margin?
   Initial Margin is required to open new positions, while Maintenance Margin is the minimum needed to keep them open.

7. Does the system use my unrealized PnL as margin?
   Yes. Unrealized profits increase your available margin; unrealized losses reduce it.

8. What happens if liquidation causes a negative balance?
   The Bitget insurance fund covers any remaining negative balance after liquidation.

9. Can I trade using both Buy/Sell and Open/Close modes?
   Yes, both are supported in Advanced Mode. You can switch between them in the contract settings.

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