How Maintenance Margin Works
Every futures position carries a maintenance margin requirement, expressed as a percentage of the position's notional value — the maintenance margin rate. On a liquid pair like BTC it can be as low as 0.5%; it climbs as your position size grows.
As the price moves against you, your unrealized loss eats into your equity. The exchange continuously compares your remaining equity to the maintenance requirement. While equity stays above it, the position lives. The instant equity touches the requirement, the liquidation engine takes over and closes you at market — see crypto liquidation for what happens in that moment.
So your liquidation price is simply the price at which your equity decays down to the maintenance margin level. Lower leverage means more equity buffer above that floor, which is why a 5x position survives a far bigger move than a 50x one. The liquidation price guide walks the full calculation.
Maintenance Margin Rate and Margin Tiers
The rate isn't fixed. Exchanges use margin tiers: the larger your position, the higher the maintenance margin rate they demand, because a large position is harder to liquidate cleanly without moving the market.
A typical BTC tier ladder runs roughly like this: a small position up to a few hundred thousand USDT notional sits near a 0.5% rate; a mid-size position steps up to about 1%; a large position worth millions in notional keeps climbing to several percent.
Two practical consequences. First, as you scale a position bigger, your liquidation price creeps closer to your entry even at the same leverage, because the maintenance floor rose under you. Second, the maximum leverage the exchange allows drops as your size grows — a 100x trade is only offered on small notional. Big size and high leverage can't coexist by design.
| Initial Margin | Maintenance Margin | |
|---|---|---|
| What it is | Equity you post to open the position, set by leverage | Minimum equity floor to keep the position open |
| When it applies | At entry — the cost of opening | Continuously, for the life of the trade |
| Typical size | Larger (e.g. 5% of notional at 20x) | Smaller (e.g. 0.5–1% of notional) |
| If breached | Order rejected — you can't open | ⚠️ Exchange liquidates at market + fee |
Worked Example
You long BTC at $60,000 with $1,000 of margin at 20x. Your notional is $20,000 — about 0.333 BTC. The maintenance rate on this tier is 0.5%, so the maintenance requirement is 0.5% of $20,000 = $100.
Your starting equity is your $1,000 margin. As BTC falls, your loss climbs and your equity = $1,000 minus the unrealized loss. When that equity decays to the $100 requirement, you're liquidated — after roughly a $900 loss, which on a $20,000 position is about a 4.5% drop, BTC near $57,300.
Same entry at 50x and the liquidation point sits barely 1.5% away; drop to 5x and it moves out past 18%. The maintenance margin barely changes — the buffer above it does, and that buffer is set by your leverage. Confirm the exact level with the liquidation calculator.
Common Mistakes
- •Assuming liquidation happens at zero margin. It happens at the maintenance floor, which is above zero, plus the exchange takes a liquidation fee — you lose slightly before your margin is fully gone.
- •Ignoring the tier jump when scaling up. Adding to a winner can push you into a higher margin tier, raising the maintenance rate and pulling your liquidation price closer than you expect.
- •Forgetting funding erodes the buffer. On perpetuals, funding payments reduce your equity over time, lowering you toward the maintenance line even if the price hasn't moved.
How This Shows Up in Your Trading Journal
The maintenance line is invisible until you cross it, and by then it's too late. A journal lets you study the near-misses.
Tradermake.money imports every trade with its leverage and margin, and logs liquidations explicitly, so you can see which positions ran dangerously close to the maintenance floor and which were comfortably clear. Because it tracks funding and fees, you also see how the carry cost was draining your buffer over time. The AI coach flags the leverage and sizing habits that keep putting you a single wick away from a force-close — before the next one catches you.