Adding Margin
A leveraged position effectively means borrowing from the exchange. That is, with, say, 100 kUSD you can borrow another 200 kUSD by a 2x leverage. This makes 300 kUSD, out of which you can open a long position, trade 200 kUSD for XTZ, and provide 100 kUSD as collateral. Now you have 200 kUSD worth of XTZ and 100 kUSD set aside as a margin.
Let's do the math
In fact, this margin acts as collateral as soon as you open the position, so at this initial point it's safe to present the margin as:
However, the margin isn't really a constant value. It changes along the way of the position being held and is affected by:
Unrealized P&L
Cumulative Funding Payment you have received
Therefore, to accurately access the actual margin size at a certain point in time, the following equation applies:
What's there to watch out for then?
The accretion of the initial margin is a positive thing. Still, market conditions can easily win your profit back. With an open position at hand you should monitor this position health and see to it that the margin doesn't fall below the minimal value - or else you are going to face liquidation. The most typical context suggesting that the trader increases the margin is when there's a good reason to keep holding the position open with a view to gaining profit in the future, but there's also a good risk for this position to get liquidated right now.
You can increase the deposited margin as follows:
Scroll down to the Position health section:
2. Press Add. The following dialogue window appears:
3. Enter the kUSD value to the Amount field, taking into account what Margin Ratio should be optimal for your trading strategy.
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