1. What is Auto Margin Addition (Isolated Margin)?
Auto Margin Addition is a risk management feature designed to enhance the safety of isolated margin trading. When your position's margin ratio approaches or falls below the maintenance margin requirement, the system automatically transfers funds from your available balance to the position. This helps prevent forced liquidation due to insufficient margin and gives you greater flexibility in volatile markets.
2. Why use Auto Margin Addition on Toobit?
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Reduce liquidation risk
During sharp market swings, positions may face liquidation if margins are not topped up in time. Auto Margin Addition automatically replenishes margin, helping you avoid forced liquidation and reduce potential losses.
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Trade with more flexibility
In traditional futures trading, traders must constantly monitor their margin levels and manually add funds. With Auto Margin Addition enabled, you can focus more on market analysis and strategy instead of worrying about margin shortfalls.
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Mitigate market volatility
By stabilizing your position and reducing the impact of sudden price moves, Auto Margin Addition helps you manage risk more effectively and avoid emotional decisions that could lead to poor trades.
3. How to use Auto Margin Addition on Toobit?
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Enable the feature
Users can enable this feature in Toobit under [Futures] > [Positions] (Isolated Margin) > [Auto Margin Addition]. Once activated, the system will automatically add a margin according to the amount set by the user.
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Set your top-up amount
A larger margin top-up can provide stronger protection but may reduce flexibility. Adjust the amount according to your trading strategy and risk tolerance.
Important notes:
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Margin monitoring: Auto Margin Addition is a tool to manage risk, not a guarantee against losses. Always evaluate the risks before using them.
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Top-up limits: If your available balance is less than the set top-up amount, the system will only add what is available. In extreme cases, this could deplete your entire available balance.
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Fund transfers: When the mark price is close to your liquidation price, the system will prioritize using available funds in your futures account to maintain the margin rate according to your leverage setting.
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Feature reset: Once a position is closed, Auto Margin Addition will reset and must be re-enabled for new positions. This feature is only available in isolated margin mode.
Example: How Auto Margin Addition works
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A trader has 100 USDT in available balance. ETH trades at 2,700 USDT. Using 5x leverage, the trader opens a long position of 0.08 ETHUSDT with an initial margin of 43.33 USDT. The maintenance margin rate is 2.81%, and the liquidation price is 2,181.59 USDT. The remaining available balance is 56.67 USDT.
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When the mark price hits 2,181.59 USDT, Auto Margin Addition activates. The system adds funds to restore the margin, leaving 13.34 USDT available. The new liquidation price is adjusted to 1,635.42 USDT, with a margin of 86.66 USDT.
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If ETH falls to 1,635.42 USDT, the system will again add the remaining 13.34 USDT, moving the liquidation price to 1,469.35 USDT.
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If the price drops further and no available balance remains, the position will be liquidated at 1,469.35 USDT, as no more margin can be added.
Toobit's Auto Margin Addition helps you manage risk more effectively, especially in volatile conditions. Use it flexibly, stay alert to market changes, and adjust your strategy as needed to protect your positions and minimize losses.
The Toobit Team
