GlossaryIntermediate
Maintenance Margin
The minimum amount of margin a leveraged position must maintain to stay open -- falling below it triggers liquidation.
Maintenance margin is the minimum amount of margin a leveraged position must keep in the account to remain open; if the position's margin falls below this threshold — generally because the market has moved against it — the position becomes subject to liquidation.
This is a distinct concept from initial margin (the amount required to open a position in the first place), which is typically set higher than maintenance margin specifically to give a position room to absorb normal price movement before facing liquidation risk. See Kaavon's Liquidation Price calculator for how this interacts with leverage and entry price.
Examples
- A position's margin falling below the maintenance margin threshold is what actually triggers liquidation, not simply the position showing a loss.
- Maintenance margin is typically set lower than the initial margin required to open a position, giving the position room to move before facing liquidation risk.