When placing an order, margin is reserved for:
The margin requirement while placing an order is the Initial Margin.
Order Margin = Order Size * Notional Value of 1 contract x Initial Margin%
Initial Margin% can vary from contract to contract and is specified in the contract specification.
At Delta we use margin scaling which means as order/ position size increases, the margin requirement increases too.
Current Initial Margin% = Initial Margin% + Slope_IM * (Order Size – Order Threshold)
Delta Exchange uses Isolated Margin System. Therefore, all open positions have dedicated margin associated with it. But all open orders on a contract share a pool of margin that supports all of them. Due to this:
For example, John places a long order for 100 BTCUSD contracts at 10x leverage. Margin is blocked and the order becomes a position. Now, John places a short order for 100 BTCUSD at 10x leverage. Since John already has an open position in the opposite direction in this contract, NO margin is required to place this order. This is Margin Offsetting.
When placing an order trading fees are reserved in advance. Depending on the type of order that is executed traders are charged with either Taker Fees or Maker Fees. Reservation of Fees occur when:
Therefore with each order, estimated trading fees for opening execution (order becomes a position) and closing execution (position is closed) are reserved. Click here to know more about Make and Taker Fees.
Trading Fees Reserved = (Quantity x Entry_Price x Fee) + (Quantity x Exit_Price x Fee)
*Entry_Price and Exit_Price are estimated using the order characteristics and prevailing prices.
Hence, the margin reserved includes Order Margin + Trading Fees Reserved.