Glossary
What is maintenance margin?
Also called: MM, maintenance requirement
Updated Ninja Terminal team
Definition
Maintenance margin is the minimum equity an exchange requires you to keep behind an open leveraged position. If your equity falls below this level, the exchange starts liquidation. It is smaller than the initial margin, so a position has a buffer between opening and liquidation. Many venues raise the rate as position size grows.
When you open a position you post initial margin. As the price moves against you, unrealized losses reduce your equity. Maintenance margin is the floor. The gap between your equity and this floor is your buffer.
How is it calculated?
maintenance margin = notional value x maintenance margin rate
Example: a 10,000 USD position with a 0.5% rate needs 50 USD of maintenance margin. With 1,000 USD of initial margin, the position has a buffer of about 950 USD before liquidation, ignoring fees and funding.
Hyperliquid sets the maintenance margin to half of the initial margin at the asset’s maximum leverage. The docs give an example: at 20x maximum leverage, the maintenance margin is 2.5%. Other venues publish tiered rates, where larger positions face higher rates. Read the contract specification of your venue.
What happens when equity falls below it?
The venue liquidates the position, partly or fully. The price where this occurs is the liquidation price. The check uses the mark price.
How does margin mode change the check?
- In cross margin, the whole account is compared with the sum of requirements across positions.
- In isolated margin, only that position’s margin is compared with its own requirement.
Ninja Terminal Quick Entry safety checks include margin ratio and liquidation distance.
Frequently asked questions
What is the difference between initial and maintenance margin?
Initial margin is the amount needed to open a position. Maintenance margin is the lower amount you must keep to avoid liquidation.
What is a margin call on crypto perpetuals?
Most crypto perpetual venues do not make a call. They liquidate the position automatically when equity falls below maintenance margin.