Maintenance Margin

What is maintenance margin?

Maintenance margin is the minimum amount of equity (your collateral after unrealised profit and loss is applied) that must remain in a margin account or open leveraged position to keep it active. If your equity falls below this threshold, the platform will typically issue a margin call, restrict risk, or begin closing the position to protect lenders and the venue. In crypto derivatives—especially in what are crypto perpetual futures—maintenance margin is the key “stay-open” requirement that sits below the initial margin you post to open the trade.

Maintenance margin crypto

In maintenance margin crypto, the requirement is usually expressed as a percentage of your position’s notional value and is monitored continuously as prices move. Your equity changes in real time because unrealised PnL is marked-to-market: if the market moves against you, equity shrinks; if it moves in your favour, equity grows. When equity approaches the maintenance margin level, your liquidation price gets closer to the current market price, meaning a smaller adverse move can trigger forced position reduction or closure.

Crypto venues often use tiered schedules where larger positions require a higher maintenance margin rate, reflecting the extra risk of liquidating size in volatile markets. Importantly, maintenance margin is not the same as initial margin: initial margin is the upfront collateral needed to open a position, while maintenance margin is the ongoing minimum you must keep to avoid liquidation. Fees, funding payments on perps, and rapid price gaps can all reduce equity and effectively “pull” you toward the maintenance threshold faster than traders expect.

MM perp

MM perp refers to the maintenance margin rules applied to perpetual futures (perps), where positions can be held indefinitely as long as margin requirements are met. In a perp, the exchange calculates your margin ratio using your collateral balance plus unrealised PnL (and often subtracting estimated fees), then compares it to the maintenance margin requirement for that contract and position size. If the ratio drops too low, the system may trigger partial liquidation (reducing position size to restore margin health) or full liquidation.

A simple way to think about it: initial margin is the “entry deposit,” while MM perp is the “minimum balance” you must keep in the account while the trade is open. The liquidation price is the approximate market price at which your equity would hit maintenance margin, after accounting for leverage, collateral, and contract rules. On decentralised perps, the same concept appears through smart contracts and keepers: if your collateral falls below the protocol’s maintenance threshold, defi liquidation mechanisms can close the position on-chain to keep the system solvent.

Why maintenance margin matters

Maintenance margin matters because it is the primary risk control that keeps leveraged markets functioning: it limits how far losses can run before a position is forcibly reduced, helping protect exchanges, liquidity providers, and other traders from bad debt. For individuals, understanding maintenance margin is essential for sizing positions, choosing leverage, and setting risk limits—because the maintenance threshold, not your entry price, often determines how long you can survive volatility.

It also explains why two traders with the same entry can have different outcomes: different collateral types, position sizes, and maintenance margin tiers can produce different liquidation price levels. In practice, monitoring maintenance margin helps you decide when to add collateral, reduce exposure, or exit before forced selling occurs—especially in the mechanics that underpin crypto perpetual futures markets.