What Is Maintenance Margin? The Minimum to Keep Your Position Open

Maintenance margin is the minimum amount of collateral you must hold to keep an open position in perpetual futures trading. It is the boundary between having an active position and being liquidated. On Perpmate, all margin is denominated in USDC, and the exchange continuously monitors whether your margin meets the maintenance requirement.

How Maintenance Margin Works

When you open a position, you deposit initial margin. As the trade moves against you, unrealized losses reduce your effective margin. Maintenance margin is the floor: if your remaining margin drops to this level, the liquidation engine closes your position automatically.

The progression:

1. You open a position with initial margin (e.g., $1,000)
2. The price moves against you, creating unrealized losses
3. Your effective margin shrinks: $1,000 - unrealized loss
4. If effective margin falls to the maintenance margin threshold, liquidation triggers

Maintenance margin is always lower than initial margin. This gap is intentional: it gives your position room to absorb normal price fluctuations without immediately being liquidated.

Maintenance Margin vs Initial Margin

Aspect	Initial Margin	Maintenance Margin
Purpose	Open a position	Keep a position open
When checked	At trade entry	Continuously while position is active
Threshold	Higher	Lower
What happens if breached	Trade is rejected	Position is liquidated
Typical ratio	100% of margin requirement	50% or less of initial margin

Practical Example

Suppose you open a long BTC position:

• Entry price: $60,000
• Position size: $10,000 (10x leverage)
• Initial margin deposited: $1,000
• Maintenance margin: $500 (50% of initial margin)

As BTC falls, your unrealized losses grow:

BTC Price	Unrealized Loss	Remaining Margin	Status
$60,000	$0	$1,000	Healthy
$59,000	-$167	$833	Healthy
$58,000	-$333	$667	Caution
$57,000	-$500	$500	At maintenance margin
$56,900	-$517	$483	Liquidation triggered

At $57,000, your remaining margin equals the maintenance requirement. Any further decline triggers the liquidation engine to close your position.

Maintenance Margin and Margin Modes

How maintenance margin applies depends on your margin mode:

Isolated Margin

In isolated margin mode, each position has its own dedicated margin pool. Maintenance margin is checked against only the margin allocated to that specific position.

• If one position breaches maintenance margin, only that position is liquidated
• Your other positions and remaining account balance are unaffected
• This limits your maximum loss to the margin allocated to the isolated position

Cross Margin

In cross margin mode, all open positions share your entire account balance as margin. Maintenance margin is checked against your total account equity.

• A losing position can draw from your entire balance before reaching maintenance margin
• This provides more liquidation buffer but puts your whole account at risk
• One deeply losing position can drain margin from other profitable positions

How to Stay Above Maintenance Margin

1. Use less leverage: Lower leverage means more initial margin relative to position size, giving you a wider gap before hitting maintenance margin
2. Set stop-losses: A stop-loss (TL) closes your position at a defined price, well before maintenance margin is breached
3. Keep free margin: Do not commit your entire balance to positions. Extra margin acts as a buffer
4. Monitor positions actively: Track your margin ratio, especially during volatile periods
5. Reduce position size in volatile markets: Wider price swings increase the chance of margin depletion

Why Maintenance Margin Exists

Maintenance margin serves two purposes:

1. Protecting traders: It forces position closure before losses exceed deposited collateral, preventing negative account balances
2. Protecting the exchange: The insurance fund and auto-deleveraging system rely on liquidations happening before margin is fully depleted. If positions could run past zero, losses would socialize to other traders

The maintenance margin threshold ensures there is still enough residual margin to cover liquidation fees and any slippage that occurs during the forced closure.

Related Terms

• Initial Margin: The collateral needed to open a position
• Margin: General overview of collateral in perpetual trading
• Liquidation Price: The price at which maintenance margin is breached
• Liquidation Engine: The system that closes positions when maintenance margin is hit
• Isolated Margin: Margin mode that limits maintenance margin checks to one position
• Cross Margin: Margin mode that pools all margin across positions