Maintenance Margin
In simple terms
The minimum amount of money you need to keep in your trading account to stay safe. If your balance drops below this level, your positions get automatically closed to prevent you from owing money.
Definition
Minimum account balance required to avoid liquidation.
In depth
Maintenance margin is the minimum collateral threshold required in leveraged trading to prevent automatic liquidation of positions. When an account's equity falls below this percentage of total open positions (typically 25-30% depending on the exchange), the platform triggers forced position closure at market prices to secure the exchange against counterparty risk. This mechanism protects both the trader from excessive losses and the platform from bad debt accumulation.
How does Maintenance Margin work?
Once a leveraged position is open, the exchange values it continuously using a mark price and computes account equity as collateral plus unrealized profit or loss. Maintenance margin is the minimum equity required to keep holding the position, and it is normally a smaller percentage of notional than the initial margin. On each price update the exchange compares equity to that floor. While equity sits above it the position stays open; when equity touches it, the platform issues a margin call or begins liquidation. Larger positions usually fall into tiers with higher maintenance rates.
An example
A trader holds a $10,000 notional long backed by $1,000 of collateral, on a contract with a 5% maintenance margin rate, so $500 of equity must remain. These are illustrative figures. A 5% adverse move produces a $500 unrealized loss, cutting equity to exactly $500 and reaching the floor. The position becomes eligible for liquidation at that point unless more collateral arrives first.
Figures are illustrative only.
What beginners get wrong
- Maintenance margin sits below initial margin, so a position can remain open at a collateral level too thin to reopen it.
- Watching the last traded price is unreliable because exchanges usually measure maintenance against a separate mark price that can differ.
- Waiting for a margin call is risky, since many crypto platforms liquidate automatically with no notification and no grace period.
Related terms
Part of
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Educational only — not financial advice.