Some users on FTX, while having positive overall balances, have negative balances in a single coin, usually USD. For instance, a user might have +2 BTC; -1,500 USD. These negative positions have been governed by these rules.
Effective now, the rules around negative balances have changed on FTX.
The change will affect two things:
- How interest is charged for negative balances
- Right now, there is no interest until you are short $30,000; at this point, you are charged 0.10% per day.
- Going forward, if you enable spot-margin there will instead just be a floating interest rate for all negative balances.
- Margin treatment of negative balances
- Right now, you are collateral converted if your negative balances exceed four times your net account balance
- Going forward, negative balances will cost margin in the same way that futures positions do, and the default threshold for collateral conversions will be the same as for futures liquidations, i.e. being below maintenance margin.
While users should think about how these changes will impact their particular accounts if they have or might put on negative USD positions, we think the primary impacts will be to increase the threshold before collateral conversions take place, and to standardize the process for interest rate charges on negative balances.
These changes are part of a larger effort to overhaul and standardize how FTX treats spot balances.