1. General Provisions
1.1 The Cross Margin Trading Rules (“Rules”) are made in accordance with the principles of fairness, openness and impartiality for the purposes of regulating margin trading and margin loans of digital assets, maintaining market order, and protecting the legitimate rights and interests of users.
1.2 These Rules are supplementary provisions to The Margin Trading Service Agreement.
1.3 These Rules shall apply to margin loaning and margin trading conducted on this Website. Any matter for which there is no specific provision in these Rules shall be subject to Margin Trading Service Agreement, User Agreement and other relevant provisions of this Website.
2.1 Margin trading users can use the net assets in their Cross Margin Accounts, multiplied by the corresponding Margin Conversion Ratio, as the Margin for Cross Margin Trading.
2.2 The Margin Conversion Ratio refers to the ratio by which the digital assets underlying a Margin are discounted against its the market value when calculating the value of such Margin.
2.3 The type of digital assets permissible to use as Margin and the Margin Conversion Ratio for each type of digital asset will be specified in the relevant announcements by the Platform.
2.4 For the sake of assets security, the Platform shall have the right to adjust the Margin Conversion Ratio from time to time.
3. Margin Loan
3.1 The Maximum Amount of Single Margin Loan refers to the maximum amount of digital asset that can be borrowed by a single User for each margin trading pairs. The calculation of the Maximum Amount of Single Margin Loan will be subject to the pre-set maximum total amount of Margin Loan allowed on the Platform and the Platform’s risk control rules.
In these Rules, the Maximum Margin Loan Amount = value of converted net assets in a Cross Margin Account * (maximum margin multiples - 1) - outstanding Margin Loan, where the value of converted net assets in a Cross Margin Account = the net assets in such Cross Margin Account * Margin Conversion Ratio
3.2 After the successful advance of a Margin Loan when the borrowed digital assets are delivered to the User's Cross Margin Account, interest shall accrue on such Margin Loan immediately. The User may use the borrowed digital assets for margin trading in the permitted trading pairs.
4.1 Interest-calculation Rules: Simple interest shall accrue on an hourly basis at the specified hourly interest rate from the actual time of the successful advance of the relevant Margin Loan. Every sixty (60) minutes shall be deemed as one (1) hour (if the loan time is less than sixty (60) minutes, it shall be deemed as one (1) hour). Interest is calculated once at the time of the successful advance of the relevant Margin Loan and at every one (1) hour interval thereafter.
4.2 Users may repay their debts in advance, and shall pay the interest thereon according to the number of hours for which the assets are borrowed. In case of less than one (1) hour, the loan time shall be deemed one (1) hour and the interest shall be calculated and paid accordingly. Repayment shall be deemed payment of interest first, and after interest are fully paid, repayment of the principal of the relevant Margin Loan.
4.3 Outstanding loan interest shall be included into the calculation of the Risk Ratio (as defined below). Assuming that there is no deduction of interest, if there is any outstanding interest unpaid for a long time, the Risk Ratio of the User's Cross Margin Account may be reduced to a level below the Liquidation Line (as defined below), leading to the risk of forced liquidation. In view of this, the Users are advised to pay interest regularly or deposit a sufficient balance in their margin accounts.
5. Repayment/Candy and Airdrop
5.1 Rules for Repayment: Users can manually select the Margin Loan order to be repaid, and any repayment shall be deemed repayment of the Margin Loan which order was made the earliest, provided that such repayment shall be deemed the payment of its interest first before repayment of the principal. After the principal and interest of a Margin Loan are paid off, the status of such Margin Loan order shall be changed to “paid off”, and no interest will be calculated for such order thereafter.
5.2 Candy and Airdrop Rules: Users are not allowed to obtain candies and airdrops from the underlying digital assets of any Margin Loan.
6. Risk Control
6.1 Users participating in Margin Loans may use the net assets in their Cross Margin Accounts as the Margin, and the digital assets in any other accounts are not included in the Margin for cross margin trading.
6.2 The Platform has the right to monitor the Risk Ratio of the Users’ Cross Margin Account on a real-time basis, and adopt corresponding measures in response to the fluctuation of the Risk Ratio.
In these Rules, the Risk Ratio of a Cross Margin Account = Total Asset Value of a Cross Margin Account/(Total Liabilities + Outstanding Interest), where:
i. market value conversion shall be calculated in USDT;
ii. Total Asset Value of a Cross Margin Account = current total market value of all digital assets in the Cross Margin Account
iii. Total Liabilities = the current total market value of all outstanding Margin Loans in the Cross Margin Account
iv. Outstanding Interest = the amount of each Margin Loan * the number of hours as loan time by the time of calculation * hourly interest rate - deduction/paid interest.
6.3 When the Risk Ratio of a Cross Margin Account reaches one hundred and twenty percent (120%) (the "Warning Line"), the system will send warning notice to the User according to the contact information provided by the User in advance, so as to inform the User of the trading risks. After receiving such notice, the User shall promptly repay the relevant Margin Loan or deposit a sufficient amount of Margin from his or her Exchange Account, so as to ensure that the Risk Ratio gets back to above the Warning Line.
6.4 When the Risk Ratio of a Cross Margin Account of a User reaches one hundred and ten percent (110%) ("Liquidation Line"), the system will automatically trigger forced liquidation, by closing the position in the Cross Margin Account held by the User, and the proceeds generated from such forced liquidation will automatically be used to repay all the Margin Loans borrowed by the User. If the User has multiple Margin Loans, repayment will be made in order according to the time when such Margin Loans occur, with the loan that occurs the earliest to be repaid first. If all assets in the User's Cross Margin Account are insufficient to repay all the Margin Loans borrowed by the User (a scenario known as "Wearing"), the Platform shall have the right to recourse for any outstanding loans and any other debts against the User.
6.5 The Users shall pay due attention to the risks of margin trading and promptly adjust their position-holding ratio to avoid risks. All losses that arise out of or in connection with forced liquidation shall be borne exclusively by the User that owns the relevant Margin Account, including but not limited to: losses that arise when the User is unable to timely adopt corresponding measures after receiving warning notice from the system, because the Risk Ratio of the relevant Cross Margin Account reaches the Warning Line and then quickly reaches the Liquidation Line due to violent fluctuation in the digital asset prices.
6.6 The Platform will manage the total market value of Margin Loans. When the aggregate amount of Margin Loans on the Platform reaches the pre-set maximum total amount of Margin Loans, the system will automatically suspend the provision of Margin Loans until the total market value of Margin Loans becomes lower than such pre-set maximum total amount.
6.7 The Platform will adjust the pre-set maximum total amount of Margin Loans and the Margin Conversion Ratio according to the actual operation conditions and risk level of the market.
6.8 In case of Wearing after a Cross Margin Account of a User is forcefully liquidated by the system to repay all Margin Loans of the User, the Platform has the right to restrict any transfer from such Cross Margin Accounts to the User’s Exchange Account or transfer from the User’s Exchange Account to any other Huobi accounts of such User. The User hereby authorizes the Platform to request other Huobi service platforms to restrict any transfer out from the User's other Huobi accounts to non-Huobi accounts, and the User agrees that any assets subsequently transferred into the Cross Margin Account shall first be used to repay the outstanding Margin Loans.
6.9 In order to guarantee the security of account assets, Users may not transfer digital assets out of a Cross Margin Account unless the Risk Ratio of such Cross Margin Account exceeds 200%, and the Risk Ratio of such Cross Margin Accounts shall not be less than 200% after such transfer.