What is Margin
Margin is used in contract trading as the part of contract, which is ensuring the contract would be available. The contract could beholden when the margin is sufficient before the contract fulfilled instead of providing the total value of contract。Normally the margin would be taken as a certain part of the contract such as 1%, 10% or 50%.
The relationship between leverage trading and margin
When the proportion of margin is 1%, such kind of situation refers to using $1 to hold a value of $100 contract and the capital is expanded to 100 times which is the 100x leverage. Thus, the proportion of margin is the same as the multiples of leverage sometimes.
1% margin = 100x leverage
10% margin = 10x leverage
50% margin = 2 times leverage
margin ragte = 1 / multiple of leverage
Users could determine the margin rate by selecting the leverage, for example, when trading BTC USDT perpetual contract, the position is one and 5x leverage is selected while the BTC price is $10000 which means one single contract equals 0.01 BTC, according to the margin formula：
Initial Margin Rate = 1/Leverage = 20%
Margin = Contract Value * Contract Subject * position * Initial Margin rage
= 10000 USDT * 0.01 BTC/張 * 1張 * 20%
= 20 USDT
(*example is only for demostration）