What Is the Formula for Calculating Margin Ratio?
The margin ratio is typically calculated as (Equity / Maintenance Margin Requirement) x 100%. Equity is the account balance plus unrealized P&L. If the ratio falls below 100%, the account is below the maintenance margin, triggering a margin call or liquidation.
Some exchanges use (Margin Balance / Position Value) for calculation.
Glossar
Margin Ratio
Threshold ⎊ The specific ratio, expressed as a percentage or fraction, comparing the current margin balance to the required margin level for a given position, which dictates the risk status of the account.
Account Balance
Holding ⎊ An account balance represents the aggregate value of a trader's assets and liabilities held within a specific platform or exchange.
Calculating Margin
Determination ⎊ Calculating margin represents the quantitative assessment of funds required to establish or maintain a position within cryptocurrency derivatives markets, options trading, or broader financial derivative structures.