Leverage & Margin
Leverage is the defining feature — and the defining risk — of perps trading. This page explains how it works mechanically, how margin and liquidation are calculated, and how to keep yourself out of trouble.
[SCREENSHOT: Leverage slider with liquidation price updating in real time]
What Leverage Does
Leverage multiplies your market exposure relative to the collateral you post.
Example: At 10x, $100 of margin controls a $1,000 position.
The asset rises 10% → your $1,000 position gains $100 — a 100% return on margin.
The asset falls 10% → your position loses $100 — your entire margin is gone.
Upside and downside are amplified equally.
Leverage Limits
The maximum leverage is set per asset. Majors like BTC and ETH support up to 40x; mid-cap assets typically 10–20x; smaller-cap assets less. The slider in the order panel shows the maximum for the asset you've selected.
Margin
Margin is the USDC collateral that backs your leveraged position.
Initial Margin
The collateral required to open a position:
Initial margin = position size × mark price ÷ leverage
Higher leverage reduces the initial margin needed but increases liquidation risk.
Maintenance Margin
The minimum margin required to keep the position open. It's set to half of the initial margin at the asset's maximum leverage, so it varies by asset class — roughly:
40x (majors)
~1.25%
20x
~2.5%
10x
~5%
3x
~16.7%
If your account equity falls below the maintenance margin requirement, liquidation is triggered.
Margin Modes: Cross vs. Isolated
Cross (default)
Shared across all your cross positions, plus unrealised PnL
A liquidation can affect the entire cross account
Capital efficiency; coordinated positions
Isolated
Locked to one position only
A liquidation cannot touch your other positions or free balance
Ringfenced risk on a specific trade
You select the mode when opening the position. Cross uses your full free balance plus unrealised PnL on winners as headroom. Isolated walls off a fixed amount.
Adding or Removing Margin
Cross positions — initial margin is locked while the position is open and cannot be selectively withdrawn.
Isolated positions — you can add or remove margin from the Positions panel after opening, which moves the liquidation price further from (or closer to) the current price.
Liquidation
Every leveraged position has a liquidation price. If the mark price reaches it, the position is closed automatically and the margin assigned to it is lost.
Why It Exists
Leverage means you can lose more than your collateral. Liquidation is the mechanism that ensures you cannot — the protocol closes the position before losses exceed the margin posted.
Mark Price, Not Last Trade
Liquidations trigger on the mark price, which combines external CEX prices with the on-platform book state. This protects against being liquidated by a single thin print or a brief wick. In high volatility, the mark price can still differ noticeably from the last trade.
How the Liquidation Process Works
Book-based attempt — when account equity falls below maintenance margin, the protocol sends a market order for the position to the order book.
Partial liquidation for large positions — for positions larger than $100k notional, the protocol initially sends only 20% as a market order, with a 30-second cooldown before another partial fires. This avoids smashing the book on a single print.
Backstop liquidation — if account equity falls below ⅔ of maintenance margin and the book hasn't absorbed the position, the liquidator vault takes over the remaining position.
What Happens to Leftover Collateral
Book-based liquidation — any remaining collateral after the position closes stays with you.
Backstop liquidation — the maintenance margin is retained by the liquidator vault to keep the backstop economically viable on average.
There is no clearance fee charged on liquidation itself.
Liquidation Price (Long, simplified)
Liquidation price moves closer to entry as leverage increases:
$100
2x
~$51
$100
5x
~$80
$100
10x
~$91
$100
20x
~$95
$100
40x
~$98
Exact liquidation price depends on the asset's maintenance margin rate and current funding accrued. The live value is always shown on the position in the Positions panel.
Reducing Liquidation Risk
1. Use lower leverage. The single most effective control. 2–5x leaves real room to breathe.
2. Add margin to an isolated position. Lowers effective leverage and pushes the liquidation price further from market.
3. Set a stop-loss above your liquidation price. Triggers off the mark price, exits on your terms, and preserves capital you can redeploy. See How to Close a Position.
4. Watch funding. Funding is paid hourly (see Fees → Funding). Sustained adverse funding eats into your margin and brings the liquidation price closer over time.
Info: The liquidation price on your position is live and reacts to mark price, accrued funding, and any margin you add or remove. Check it before walking away from a position, especially in volatile markets.
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