« Auto Margin Replenishment

November 8, 2020 • ☕️ 1 min read

intro

AMR is a completely optional feature that traders can enable in the Mushino Account Settings.

If you have been trading on other derivatives platforms, you may be familiar with the feature already.

The purpose of the feature is to prevent your position from being liquidated.

It does this by automatically replenishing your position margin when it drops dangerously low.

A very low position margin (as compared to the size of your position) will eventually cause your position to be liquidated.

By topping up your position margin automatically, the margin is kept at a level that does not cause any problems.

The margin that is used in the top up is drawn from your Cash Balance.

Benefits of AMR

  • For positions where you don’t use your entire Cash Balance as margin, your position is less likely to be liquidated.

Downsides of AMR

  • Your loss is no longer limited to what you put in to your position. It is possible for you to lose your entire Cash Balance (but not more than that).

AMR strategies

AMR comes with three different strategies:

  • Passive
  • Normal
  • Aggressive

In Passive mode, AMR will kick in when your position margin is 110% of the minimum maintenance margin level (the level that would cause you to get liquidated).

In Normal mode, AMR will kick in when your position margin is 200% of the minimum maintenance margin level (the level that would cause you to get liquidated).

In Aggressive mode, AMR will kick in when your position margin is 400% of the minimum maintenance margin level (the level that would cause you to get liquidated).

To be on the safe side, we recommend using either Normal or Aggressive mode.

When AMR kicks in, how much is replenished?

The amount replenished will be decided from the following formula:

Amount Replenished = Min(Available Cash Balance, Current Position Margin)

In other words, once AMR kicks in, if your Cash Balance supports it, your position margin will effectively be doubled.

If your Cash Balance is not sufficient to double your current position margin, the system will replenish with whatever is available instead.

Example (Passive Strategy)

  • Your position margin drops to 110% of the minimum maintenance level (dangerously close to liquidation).

  • AMR kicks in, doubling your position margin

  • Your position margin is now 220% of the minimum maintenance level (quite far from liquidation).