Margin

Margin mode

Currently the default margin mode on Vest Exchange is Cross margin. Cross margin allows for maximal capital efficiency by sharing collateral between all other cross margin positions, meaning your gains from one position can offset losses from another.

Your portfolio value is calculated as:

Portfolio Value = Collateral + Total Realized PnL + Total Unrealized PnL

Leverage for your entire portfolio is:

Leverage = Total Notional Value / Portfolio Value

When you specify the size of a new trade, it automatically adjusts the leverage for your entire portfolio.

For new markets with less price history or markets with a high degree of volatility, the default margin mode is set to Isolated margin, where a position’s collateral is constrained to that asset.

Liquidations in cross margin positions do not affect positions in isolated margin, and vice versa.

Currently users cannot manually select the margin mode on Vest.

Margin requirements

To open a new position, your portfolio value must meet the total initial margin requirement:

Total Initial Margin Requirement = Σ (Position Size × Index Price × Initial Margin Ratio)

If your portfolio value falls below this threshold, the trade won’t execute.

The maintenance margin requirement works similarly, but uses the maintenance margin ratio. If your portfolio value dips below this maintenance threshold due to unrealized losses, liquidations occur.