Collateral Management

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Collateral on FTX is calculated in USD value terms. We follow a multi-currency cross-margining methodology and thereby accept a variety of non-USD assets as collateral for derivatives and spot margin positions. The PnL is always settled in USD regardless of which type of collateral is used.

The user can choose whether to use FTT as collateral on the settings page. By default the account uses FTT as collateral. 

 

List of Non-USD Collateral

Coin Weight (total) Weight (initial) IMF factor
1INCH 0.9 0.85 0.0005
AAPL 0.9 0.85 0.00125
AAVE 0.9 0.85 0.0025
ABNB 0.9 0.85 0.005
ACB 0.9 0.85 0.0025
ALGO 0.95 0.9 0.00015
ALPHA 0.9 0.85 0.00025
AMC 0.9 0.85 0.0025
AMD 0.9 0.85 0.001
AMZN 0.9 0.85 0.003
APE 0.95 0.9 0.0005
APHA 0.9 0.85 0.001
ARKK 0.9 0.85 0.005
ASD 0.7 0.65 0.0001
ATOM 0.9 0.85 0.0005
AUD 0.99 0.98

0.00001

AVAX 0.9 0.85

0.0007

BABA 0.9 0.85 0.0025
BAND 0.85 0.8 0.001
BB 0.9 0.85 0.0025
BCH 0.95 0.9 0.0008
BILI 0.9 0.85 0.005
BITW 0.9 0.85 0.001
BNB 0.95 0.9 0.0005
BNT 0.9 0.85 0.0025
BNTX 0.9 0.85 0.002
BRL 0.99 0.98 0.00001
BRZ 0.99 0.98 0.00001
BTC 0.975 0.95 0.002
BTMX 0.7 0.65 0.0008
BUSD 1 1 0
BVOL 0.85 0.8 0.005
BYND 0.9 0.85 0.0075
CAD 0.99 0.98 0.00001
CEL 0.85 0.8 0.001
CGC 0.9 0.85 0.0025
CHF 0.99 0.98 0.00001
COIN 0.85 0.8 0.01
COMP 0.9 0.85 0.002
CRON 0.9 0.85 0.001
CUSDT 0.9 0.85 0.000005
DAI 0.9 0.85 0.00005
DOGE 0.95 0.9 0.00002
DOT 0.9 0.85 0.0002
ETH 0.95 0.9 0.0004
ETHE 0.9 0.85 0.0025
EUR 0.99 0.98 0.00001
EURT 0.975 0.95 0.0005
FB 0.9 0.85 0.002
FIDA 0.85 0.8 0.001
FTM 0.85 0.8 0.0005
FTT 0.95 0.95 0.0005
GBP 0.99 0.98 0.00001
GBTC 0.9 0.85 0.0025
GDX 0.9 0.85 0.0005
GDXJ 0.9 0.85 0.003
GLD 0.9 0.85 0.0005
GLXY 0.9 0.85 0.005
GME 0.9 0.85 0.005
GOOGL 0.9 0.85 0.01
GRT 0.9 0.85 0.00025
HKD 0.99 0.98 0.00001
HOLY 0.9 0.85 0.0005
HOOD 0.85 0.8 0.005
HT 0.9 0.85 0.0003
IBVOL 0.85 0.8 0.015
KNC 0.95 0.9 0.001
LEO 0.85 0.8 0.001
LINK 0.95 0.9 0.0003
LRC 0.85 0.8 0.0005
LTC 0.95 0.9 0.0004
LUNC 0.9 0.85 0.0001
MATIC 0.85 0.8 0.00004
MKR 0.9 0.85 0.007
MOB 0.6 0.55 0.005
MRNA 0.9 0.85 0.001
MSTR 0.9 0.85 0.008
NEAR 0.95 0.9 0.001
NFLX 0.9 0.85 0.0025
NIO 0.9 0.85 0.0008
NOK 0.9 0.85 0.001
NVDA 0.9 0.85 0.01
OKB 0.9 0.85 0.0003
OMG 0.85 0.8 0.001
USDP 1 1 0
PAXG 0.95 0.9 0.002
PENN 0.9 0.85 0.005
PFE 0.9 0.85 0.001
PYPL 0.9 0.85 0.002
RAY 0.85 0.8 0.0005
REN 0.9 0.85 0.00025
RSR 0.85 0.8 0.0001
SECO 0.9 0.85 0.0005
SLV 0.9 0.85 0.0005
SNX 0.85 0.8 0.001
SOL 0.9 0.85 0.0003
STSOL 0.9 0.85 0.0004
MSOL 0.9 0.85 0.0004
SPY 0.9 0.85 0.0005
SQ 0.9 0.85 0.002
SRM 0.9 0.85 0.0005
SUSHI 0.95 0.9 0.0004
SXP 0.9 0.85 0.0005
TLRY 0.9 0.85 0.001
TOMO 0.85 0.8 0.0005
TRX 0.9 0.85 0.00001
TRY 0.99 0.98 0.00001
TRYB 0.9 0.85 0.00001
TSLA 0.9 0.85 0.01
TSM 0.9 0.85 0.003
TUSD 1 1 0
TWTR 0.9 0.85 0.001
UBER 0.9 0.85 0.001
UNI 0.95 0.9 0.0005
USD 1 1 0
USDC 1 1 0
USDT 0.975 0.95 0.000005
USO 0.9 0.85 0.001
USTC 0.85 0.8 0.0005
WBTC 0.975 0.95 0.005
WUSDC 1 1 0
WUSDT 0.975 0.95 0.00001
XAUT 0.95 0.9 0.002
XRP 0.95 0.9 0.00002
YFI 0.9 0.85 0.015
ZAR 0.99 0.98 0.00001
ZM 0.9 0.85 0.002
ZRX 0.85 0.8 0.0003

Note: Always use https://ftx.com/api/wallet/coins as the source of truth.

 

Definitions & Formulas

Term Definition Formula
USD collateral USD, and a selection of USD stablecoins that are valued 1:1 with USD. Stablecoins valued 1:1 with USD:
USDC, TUSD, USDP, BUSD.

Non-USD collateral

Alternative assets accepted as collateral. See list of non-USD collateral accepted here.
Initial Weight Factor used to determine the collateral value for the purpose of initial margin if spot margin is not enabled (i.e., opening new leverage positions) See Non-USD collateral table above.
Total Weight Factor used to determine the collateral value for the purpose of maintenance margin calculation and opening new positions if spot margin is enabled. See Non-USD collateral table above.
IMF factor Multiplier assigned to each asset on FTX. It is set based on factors such as liquidity or market capitalization. See Non-USD collateral table above.
Collateral Used Total of collateral being used by all open derivatives or spot margin positions in the subaccount, as well as collateral tied up in open orders, including spot. sum (Position1 Open Size Notional * Position1 IMF, Position2 Open Size Notional * Position2 IMF,...) + sum(Spot Order1 Size * Mark Price, Spot Order2 Size * Mark Price,...)
Free collateral Total collateral available that can be used for opening new positions and withdrawn from the exchange, excluding collateral locked in open orders or open positions. min(collateral, collateral + unrealized PNL) - (amount of collateral tied up in open orders)

Collateral Weight

Multiplier used to determine the total value of your collateral. min (1.1 / [IMF Weight * {1.1 / Total Weight - 1} + 1] , 1.1 / [Spot Margin IMF Factor * sqrt{size} * IMF Weight + 1] )

If spot margin is enabled, Weight = Total Weight. Otherwise, Initial Weight.
Collateral Value Collateral value of each asset in your inventory For positive balances, the collateral value is calculated as follows:
= Size * Mark Price * Collateral Weight

For negative balances the collateral value is calculated as follows:
= Size * Mark Price

Total Account Collateral

Sum of positive and negative collateral values Sum(Collateral Value 1, Collateral Value 2,..)

 

Examples

Let’s assume you're currently holding the following balances and that spot margin is enabled in your account:

Asset

Size

Mark Price

Notional USD

Initial Weight

Total Weight

IMF Factor

USD

100,000

$1

$100,000

1

1

-

BTC

2.5

$20,000

$50,000

0.95

0.975

0.002

ETH

10

$1,500

$15,000

0.90

0.95

0.0004

Total (USD)

$165,000

 

Calculating Total Collateral Value

To start, let's first calculate the Collateral Weight of the assets you're currently holding.

For BTC:

= min (1.1 / [IMF Weight * {1.1 / Total Weight - 1} + 1] , 1.1 / [Spot Margin IMF Factor * sqrt{size} * IMF Weight + 1] )

= min (1.1 / [1 * {1.1 / 0.975 - 1} + 1], 1.1 / [0.002 * sqrt(2.5) * 1 + 1] )

= min (0.975, 1.09653246)

= 0.975

That means that the Collateral Value of your BTC will equal:

$50,000  * 0.975 = $48,750. 

 

Applying the same formula to the rest of your assets:

Asset

Notional USD

Collateral Weight

Total Collateral Value

USD

$100,000

1

$100,000

BTC

$50,000

0.975

$48,750

ETH

$15,000

0.95

$14,250

Total

$165,000

-

$163,000

 

Note: In the vast majority of cases, Collateral Weight will simply be either the asset’s Initial Weight or Total Weight, depending on whether you have spot margin enabled or not. However, if you hold a significant balance of a single coin, its Collateral Weight may go down.

As an example, imagine that instead of 2.5 BTC, you're holding 10,000 BTC in your account, which would be equal to $200,000,000 assuming BTC is trading at $20,000. The Collateral Weight for your BTC would be as follows:

= min (1.1 / [1 * {1.1 / 0.975 - 1} + 1], 1.1 / [0.002 * sqrt(10,000) * 1 + 1] )

= min (0.975, 0.9167)

= 0.9167

Assuming BTC is trading at $20,000, the value of your collateral would be 0.9167 * 10,000 * $20,000 = $183,333,333.

Additionally, Collateral Weight can also change depending on the asset's IMF Weight and/or IMF Factor (as illustrated in the formula).

 

Calculating Free Collateral

Now, let’s calculate Free Collateral to understand how open positions and orders affect your collateral. Assume you have the following positions and open orders in your account:

Market

Position Size

Mark Price

Position Notional

IMF %

MMF

Collateral Used

SOL-PERP

(Long)

1,000

$40

$40,000

10%

3%

$4,000

LTC/USD 

(spot margin short)

100

$50

$5,000

15.79%

6%

$789

USDT-PERP (Open Long)

10,000

$1

$10,000

10%

3%

$1,000

FTT/USD (Open Buy)

1,000

$30

$30,000

-

-

$30,000

Total (sum)

-

-

$85,000

-

-

$35,789

Note: “Open” in this context means that the order has not been filled yet.

 

Total Collateral Used is calculated by multiplying the Position Open Size Notional times its IMF. For open spot orders, the Collateral Used will be the full notional size of the order. When we add all of this up, the Total Collateral Used comes out to $35,789.

Before we calculate Free Collateral, keep in mind that the LTC/USD spot margin short position creates a negative LTC spot balance. In addition to requiring margin, negative spot positions also decrease your account collateral value.

In other words, our LTC/USD spot margin short is using $789 in Collateral, and on top of that, you will have an LTC balance of -$5,000. At the same time, your USD balance will increase by $5,000 as well.

 

To illustrate this, here’s an updated overview of the Total Account Collateral:

Total Account Collateral

Asset

Size

Mark Price

Notional USD

Initial Weight

Total Weight

IMF Factor

Collateral Weight

Total Collateral

USD

105,000

$1

$105,000

1

1

-

1

$105,000

BTC

2.5

$20,000

$50,000

0.95

0.975

0.002

0.975

$48,750

ETH

10

$1,500

$15,000

0.9

0.95

0.0004

0.95

$14,250

LTC

-100

$50

-$5,000

-

-

-

NA

-$5,000

Total Collateral

-

-

$165,000

-

-

-

-

$163,000

 

Now, to calculate Free Collateral, we simply need to subtract Total Account Collateral - Total Collateral Used:

Total Collateral

$163,000

Total Collateral Used

$35,789

Free Collateral

$127,211

 

In conclusion, you have $127,211 in Free Collateral, which can be used to open new positions, transferred, or lent. 

 

Handling Negative USD Balances

Selling your non-USD collateral

Note: IF YOU DO NOT WANT YOUR ASSETS TO BE CONVERTED TO COVER NEGATIVE USD BALANCES, PLEASE SKIP TO THE NEXT SECTION

For accounts with spot-margin trading disabled, FTX will automatically send market orders to convert the non-USD collateral into USD if the USD balance is negative and any of the following conditions hold:

  • You are close to liquidation: your account's margin fraction is less than 20bps + maintenance margin fraction requirement
  • Your negative USD balance is over $30,000 in magnitude
  • Your negative USD balance is over 4 times larger than your net account collateral

FTX will prioritize conversion to USD based on the collateral quality of the asset as measured by the Total Weight. For the assets that carry the same Total Weight, the asset with the higher notional USD value will be converted first. Note that FTT collateral is always used last.

For example, if both BTC and USDT are eligible choices, FTX will choose the larger balance in USD terms. As an illustration, if you have $1000 of USDT and $100 of BTC, the USDT will be traded into USD first. 

Note that collateral conversions will potentially top you up so that you have slightly more than zero USD left by converting 10% more than is necessary in case of price movements.

 

Charging interest instead of collateral converting

Instead of having your collateral converted into USD, you can enable spot margin trading on your account in order to automatically borrow the negative USD balance via the spot margin market and pay the prevailing USD borrow rate. To enable spot margin trading, go to the Margin section on your profile page and click "Enable spot margin trading".

As an example, assume you opened a long futures position and only had BTC as collateral. If your position goes against you, you would have a negative USD balance. At that point, instead of converting your BTC collateral, FTX will use the BTC as collateral to borrow USD from the spot margin market for the amount you’re negative. You will be charged the prevailing USD borrow rate for any negative USD balance. 

 

How can your USD balance go negative?

Assume you have 110,000 USDT in your account and nothing else and USDT is trading at $1. Let’s say BTC-PERP trading at $20,000 and you open a 50 BTC-PERP long position, making the total position notional equal $1,000,000. 

A few minutes later, the price of BTC-PERP goes down. What happens? Remember that :

  1. Your USD balance is $0 (because you used USDT as collateral to open your position)
  2. Unrealized PnL affects your USD balance in real time:
    • Unrealized PnL from open futures positions is settled in USD every ~30 seconds. This means that debits or credits are happening on your account as your positions change in value, which ultimately affects your USD balance and collateral. Traders that have a positive PNL can withdraw it, use it to buy spot, lend it out, use it as collateral, etc. as soon as it’s been credited to their account. Trading fees and funding payments also affect your PnL. Also, keep in mind that PnL isn’t realized on spot trades, only derivatives.
    • To calculate your PnL on open positions: 

      • if you bought = position size * (mark price - entry price) 
      • if you sold = position size * (entry price - mark price)

So when the price of BTC-PERP goes down, you start accruing a negative USD balance. 

To illustrate this, say BTC-PERP is now trading at $19,600 and USDT is still trading at $1:

= position size * (mark price - entry price) 

= 50 * ($19,600 - $20,000) = -$20,000

So, your new account balance would be:

  • USD = –$20,000
  • USDT = 110,000 USDT

 

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