Derivatives & Risk

What is the difference between initial margin and maintenance margin?

Initial margin is the collateral required to open a leveraged position, while maintenance margin is the lower minimum that must be kept to hold it open. When losses erode equity below the maintenance level, the position faces a margin call or automatic liquidation. For example, an exchange might require 10% initial margin to open a trade but liquidate once equity falls to 5%. The gap between the two defines how much adverse movement a position can absorb. Knowing where these thresholds sit is central to managing leverage and the downside it carries.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.