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Every exchange sets a minimum equity requirement for keeping a leveraged position open. If your account balance drops below that level, the exchange closes the trade. That level is the maintenance margin, and it sits at the core of how liquidation works in crypto.
Traders who understand it can calculate their real risk before entering a position. This article covers what maintenance margin is, how platforms apply it, and what it means for your liquidation price.
Not yet clear on how margin connects to leverage and position sizing? Start with What is Margin in Trading before going further. The maintenance margin concept makes more sense once the base mechanics are clear.
Maintenance margin and initial margin are not the same number. Initial margin is what you put up to open the trade. Maintenance margin is the lower threshold the exchange sets to keep it open. The gap between the two is your actual buffer. On a 20x leveraged position, that buffer is often less than 5% of price movement. Use the Liquidation Price Calculator to see exactly how much room you have before the position closes automatically.
Maintenance margin is the minimum equity your account needs to hold in order to keep a leveraged position open. Once your balance hits or falls below this level, the exchange treats your position as too risky and begins liquidating.
This is separate from the initial margin, which is what you deposit to open the trade in the first place. Maintenance margin comes after. It is the floor the exchange sets, and if your equity touches it, the position closes.
Exchanges express this as a percentage of your total position value. On Bybit, the maintenance margin rate for BTCUSDT positions under 2,000,000 USDT is 0.5%. That sounds like almost nothing, but at 50x or 100x leverage, that fraction of a percent is what separates an open position from a liquidated one.
Behind the scenes, every exchange is constantly checking your open positions. It compares your current equity (your margin plus or minus unrealized P&L) against the maintenance margin requirement.
When equity stays above that requirement, everything runs normally. The position is yours to manage.
The moment equity drops to the maintenance threshold, the exchange’s liquidation engine starts closing your position. Depending on the platform, that may be a partial liquidation or the entire position at once.
One thing worth knowing: exchanges use the mark price for these checks, not the last traded price. The mark price pulls from multiple sources to smooth out anomalies, which prevents a single wick on one exchange from wiping out positions across the board.
The number to watch on your screen is the margin ratio. On Binance, when that ratio reaches 100%, your remaining balance equals your maintenance margin and liquidation begins. Most platforms display this in real time, and monitoring it is basic housekeeping for any leveraged trade.
These are two different requirements with two different jobs.
Initial margin is the amount you deposit to open a position. Going long on BTC with 10x leverage and a $9,400 position means putting up $940 upfront. That is your initial margin.
Maintenance margin is the minimum the exchange requires you to hold after the trade is open. It is lower than the initial margin, often by a significant amount. You might open with $940 and only need $47 in maintenance margin to stay in the trade.
The distance between those two numbers is your breathing room. The wider the gap, the more room the price has to move against you before liquidation. The narrower the gap, the closer you are sitting to the trigger.
To see where these thresholds fall for a specific trade, use the Margin Call Calculator. It shows the exact price level where a margin call would hit, which is useful for sizing your exposure before you enter.
Your liquidation price is directly tied to your maintenance margin. The formula works like this:
Long position: Liquidation Price = Entry Price – [(Initial Margin – Maintenance Margin) / Position Size]
Short position: flip the subtraction to addition.
The higher your maintenance margin requirement relative to your initial margin, the closer your liquidation price sits to your entry. Higher leverage shrinks the initial margin since you are putting up less of your own capital, which compresses the distance between entry and liquidation even further.
Here is a concrete example. You open a $9,600 long position on ETH at $3,200 with 20x leverage. Your initial margin is $480. The maintenance margin rate is 0.5% of position value, which is $48. The buffer between those two figures is $432. Spread across 3 ETH, that puts your liquidation price around $3,056. That is roughly 4.5% below your entry. At 50x leverage with the same position, that buffer shrinks to around 1.5%. It does not take much.
Run these numbers before placing a trade using the Liquidation Price Calculator. Knowing your exact liquidation level before entering is one of the most practical steps in leveraged trading.
Most traders think about leverage in terms of potential gain. The maintenance margin formula shows you the other side: at 20x leverage, a 4.5% move against you can end the trade entirely. At 50x, it takes 1.5%. Those percentages happen on a normal trading day. Before entering a leveraged position, calculate your liquidation price and compare it to the asset’s average daily range. If your buffer is inside that range, liquidation is not a tail risk. It is a likely outcome. Use the Liquidation Price Calculator to run this check in under a minute.
Maintenance margin requirements are not static.
Exchanges use tiered risk limit systems that adjust based on position size and market conditions. When volatility spikes, they raise the maintenance margin rate. Sometimes the notice is short. Sometimes it is effectively none.
From the exchange’s perspective, the logic is straightforward. Sharp price swings increase the chance of cascading liquidations, and large positions become harder to close without pushing the market further. Raising the rate builds a thicker cushion between open positions and forced closures.
From your side, it means a position that was safely above the maintenance threshold yesterday could be on the edge today, not because the price moved against you, but because the exchange raised the requirement.
In early February 2026, a single-day crash triggered over $2 billion in crypto liquidations across more than 335,000 accounts. Events like that tend to coincide with exchanges tightening requirements, which is exactly when traders can least afford it.
If your equity is only slightly above the maintenance level, one small move, a funding fee deduction, or a brief volatility spike can trigger liquidation. There is no room for normal market noise.
On perpetual futures, funding payments occur every eight hours. If you are paying funding, those fees are deducted from your position margin. That pulls your liquidation price closer with every payment cycle, even if the market has not moved.
Funding fees are deducted from your margin automatically, not from a separate balance. This means your liquidation price moves closer every 8 hours when you are on the paying side, even if the market price has not changed at all. A position that looks safe at entry can drift toward liquidation over two or three days purely from funding costs. Before holding any perpetual futures position overnight, use the Funding Rate Calculator to calculate how much your margin will shrink per cycle and where your liquidation price will be after 24 or 48 hours.
In cross margin mode, your entire account balance acts as collateral for all open positions. That sounds like extra protection, but it means one bad trade can drain your whole account. A single position hitting the maintenance threshold does not just close itself. It can consume your full balance. Isolated margin limits the damage to the amount allocated to that specific position.
Depositing more funds to push your liquidation price further away can buy time. But if the trend keeps moving against you, you are feeding more capital into a losing position. Know the difference between a trade that needs room and a trade that is simply wrong.
You do not need to run the liquidation formula every time you check a position. A practical alternative: calculate how far the current price is from your liquidation price as a percentage. That is your buffer.
A 12% buffer gives you room to ride out a rough day. A 2% buffer means one sharp hourly candle could close the trade.
Compare that to the asset you are trading. Bitcoin moves 3% to 5% on a normal day. If your buffer is tighter than typical daily volatility, you are not managing the setup. You are hoping conditions stay calm long enough for the trade to work.
Three things to check before and during any leveraged position: your liquidation price, your percentage distance from it, and whether upcoming funding payments will shrink that distance. This risk management guide covers this process in more detail.
The exchange triggers liquidation automatically. It does not send a warning first. Once your equity drops to the maintenance threshold, the platform closes your position to recover the borrowed funds. In fast markets this can happen within seconds of the price moving against you.
No. Each exchange sets its own rates and applies them in tiers based on position size. A small BTC position on Bybit might carry a 0.5% maintenance margin rate, while a larger position on the same exchange carries a higher rate. Rates also vary between assets. Crypto positions typically carry higher maintenance requirements than traditional futures because of the higher volatility.
Yes, but timing matters. If you deposit additional funds before your equity hits the maintenance threshold, the exchange recalculates your liquidation price and gives the position more room. If the price is moving fast, there may not be enough time for the deposit to process before liquidation triggers. The more reliable approach is to size the position correctly before entering so you are not relying on emergency top-ups.
It can. Exchanges use tiered risk limit systems that adjust maintenance margin rates based on position size and prevailing market conditions. During periods of extreme volatility, some exchanges raise their requirements with little or no notice. A position that was comfortably above the threshold can move toward liquidation not because the price changed, but because the exchange raised the bar.
A margin call is a warning. It means your equity is getting close to the maintenance margin and the exchange is telling you to deposit more funds or reduce your position. Liquidation is the outcome if you do not act. On traditional futures platforms there is usually a gap between the margin call and the forced closure. On most crypto exchanges that gap is very small or does not exist at all. Liquidation can happen without a prior warning if the market moves fast enough. See margin call vs liquidation for a full breakdown of how both thresholds work.
Maintenance margin is the threshold between an open trade and a liquidated one. The exchange does not negotiate when your equity hits it. Knowing where that level sits, keeping real distance from it, and treating any shrinkage of your buffer as a reason to act rather than wait is as fundamental as risk management gets in leveraged trading.
This article is published under Leverage.Trading’s leverage trading & crypto derivatives education , an independent risk-first learning system built to help traders quantify and manage risk before trading.
