The Margin Ratio is a crucial metric used to measure the level of risk associated with a given position. It is calculated by dividing the position's value by the collateral's value.
For example, if you deposit 10 WETH and go long on 5 SNV at a price of 20 ETH, your Margin Ratio would be 10% (10/100)
However, as SNV prices fluctuate, so does the Margin Ratio.
For instance, if the price of SNV were to rise to 25 ETH, your unrealized profit would be 25 ETH, thus increasing the value of your collateral to 35 WETH. This would result in a new Margin Ratio of 28% (35/125).
On the other hand, if the price of SNV were to decrease to 19 ETH, the value of your collateral would decrease to 5 WETH, resulting in a Margin Ratio of 0.052% (5/95).
Monitoring the Margin Ratio regularly is important, as a low ratio may indicate a high level of risk for the position.
Buying power refers to the maximum amount you can go long or short on using the available balance in an account. Bliv is currently offering leverage of 10x on SNV, which means that for every dollar deposited, you can buy up to 10 dollars worth of SNV.
For instance, if you deposit 10 WETH into your account, your buying power becomes $100 (10 WETH x 10x leverage).
This means you can now open a short position of 2 SNV at a price of 10 ETH. This would result in a new buying power of $80 (100 - 20), as you have used a portion of your available balance to open the short position.
Margin Usage refers to the margin percentage currently utilized in a given position. For instance, if you deposit 10 WETH into your account, your Margin Usage would be 0%.
However, if you open a long position of 2 SNV at a price of 10 ETH, your Margin Usage would be calculated as $20/100 = 20%.