What is the maximum times for CoinEx margin account?

CoinEx's 45-day maximum margin account duration mandates that traders close positions within this timeframe to prevent automatic liquidation triggered by exceeding the limit.

Nov 24, 2024 at 11:24 am

Understanding the Maximum Margin Account Duration on CoinEx

CoinEx, a renowned cryptocurrency exchange, provides its users with access to margin trading, a financial tool that allows traders to multiply their potential profits by leveraging borrowed funds. However, it is crucial to comprehend the maximum duration for which a margin account can remain open on CoinEx, as this knowledge is pivotal in managing risk effectively.

Maximum Margin Account Duration on CoinEx

CoinEx has established a maximum duration of 45 days for its margin accounts. This means that once a margin account is opened, it must be closed within this stipulated timeframe. Failure to close the margin account within the 45-day window will result in automatic liquidation of all open positions, with any resultant losses borne by the trader.

Reasons for Maximum Duration:

• Risk Management: The 45-day limit aims to mitigate potential risks associated with extended margin trading. Prolonged exposure to market volatility and margin calls can lead to substantial losses, which CoinEx seeks to minimize by enforcing a time constraint.
• Account Turnover: This duration facilitates regular account turnover, promoting active trading and preventing prolonged inactivity of margin accounts. It encourages traders to make informed decisions and close positions within a reasonable timeframe.

Consequences of Exceeding Maximum Duration

As mentioned earlier, exceeding the 45-day maximum margin account duration will trigger forced liquidation of all open positions. This process is initiated automatically by CoinEx to protect the platform and traders from excessive risk.

Mechanics of Forced Liquidation:

• Initiation: The liquidation process is triggered when the margin account duration exceeds 45 days.
• Position Closure: All open positions, regardless of their profitability, will be closed at the prevailing market prices.
• Debt Repayment: The proceeds from the forced liquidation are utilized to repay the outstanding loan amount, with any surplus funds returned to the trader.
• Loss Absorption: Any deficit resulting from the forced liquidation, where the total loan amount exceeds the proceeds from the liquidated positions, will be borne by the trader.

Steps to Prevent Margin Account Liquidation

To avoid the potential consequences of exceeding the maximum margin account duration, traders are advised to adhere to the following steps:

• Monitor Account Duration: Regularly track the outstanding duration of your margin account to ensure it remains within the 45-day limit.
• Close Open Positions: Prior to reaching the 45-day mark, gradually close open positions to reduce the risk of forced liquidation.
• Maintain Sufficient Funds: Regularly deposit additional funds into your margin account to maintain a healthy margin ratio, reducing the likelihood of margin calls.
• Consider Hedging Strategies: Employ hedging strategies, such as placing stop-loss orders or entering into opposing positions, to manage risk and minimize the impact of adverse price movements.