Maintenance Margin

Maintenance Margin is the absolute minimum amount of account equity (collateral) you must maintain to keep a leveraged position open before the exchange forcibly closes your trade and charges you a Liquidation Penalty.

It is the final safety net for the exchange to ensure you don’t lose more money than you actually have in your account.

---

Initial Margin vs Maintenance Margin

When you open a trade with Leverage, you are borrowing money from the exchange.

1. Initial Margin: The amount of your own money you need to open the position.
   • If you want a $10,000 position at 10x leverage, your Initial Margin is $1,000.
2. Maintenance Margin: The amount of money you need to keep it open when the trade goes against you.
   • The exchange might set the Maintenance Margin requirement at 2% of the total position size.
   • 2% of $10,000 = $200.

The Liquidation Trigger

You deposited $1,000. The position drops in value by $800. Your remaining equity is now exactly $200. You have hit the Maintenance Margin threshold.

At this exact millisecond, the exchange’s liquidation engine kicks in. It forcibly market-sells your $10,000 position. It takes back the $9,000 you borrowed. It uses your remaining $200 to pay the Liquidation Penalty (often given to liquidation bots as a bounty). You are left with $0.

Pro Tip for Degen Traders: Never use your Maintenance Margin as a stop-loss. Always place a hard stop-loss above your liquidation price to avoid paying the massive penalty fees. Furthermore, understand whether you are using Cross or Isolated Margin, as Cross Margin will drain your entire wallet to satisfy the maintenance requirement.

---

Related Terms

• Leverage — What determines your initial margin requirements.
• Cross vs Isolated Margin — How maintenance margin is calculated across your wallet.
• Mark Price — The price oracle that triggers the maintenance margin check.