Based on the direction of your position — Long (Buy) or Short (Sell) — the formulas used to calculate the order cost of the Limit Order and Market Order will be different.
Order cost does not include funding fee. Funding fees will be calculated separately and deducted for traders based on current market conditions
Long (Buy) Position
Example
Trader A open a Long position of 1 BTC at USD 50,000 with 10x leverage.
The Order Cost is calculated as follows:
Initial Margin = (50000 * 1) / 10 = 5000 USDT
Fee to Open position = 50000 * 1 * 0.04% = 20 USDT
Bankruptcy Price = (50000 * 9) / 10 = USD 45000
Fee to Close position = 1 * 45000 * 0.04% = 18 USDT
In the case, Order Cost = 5000 + 20 + 18 = 5038 USDT
Revisiting Trader A’s case:
Order Quantity = (Order Cost * Leverage) / [Order Price * (0.0008 * Leverage + 0.9996)]
= (5038 * 10) / [50000 * (0.0008 * 10 + 0.9996)] = 1 BTC
Short (Sell) Position
Example
Trader B open a Short position of 1 BTC at USD 55,000 with 10x leverage.
The Order Cost is calculated as follows:
Initial Margin = (55000 * 1) / 10 = 5500 USDT
Fee to Open position = 55000 * 1 * 0.04% = 22 USDT
Bankruptcy Price = (55000 * 11) / 10 = 60500 USDT
Fee to Close position = 1 * 60500 * 0.04% = 24.2 USDT
In the case, Order Cost = 5500 + 22 + 24.2 = 5546.2 USDT
Revisiting Trader B’s case:
Order Quantity = (Order Cost * Leverage) / [Order Price * (0.0008 * Leverage + 1.0004)]
= (5546.2 * 10) / [55000 * (0.0008 * 10 + 1.0004)] = 1 BTC
Note
- The Order Cost ( Initial Margin + Two-Way Taker Fee ) required has to be smaller than or equal to the available balance.
Open Loss
When there is an unfavorable difference between the markup price and the position opening price, the trader will need to add an additional Open Loss to his position. Open Loss will be added to the margin of the position, short blocking the immediate liquidation caused by the price difference.