> For the complete documentation index, see [llms.txt](https://docs.tryliquid.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tryliquid.xyz/trading/leverage.md). # Leverage & Margin How leverage, cross margin, isolated margin, initial margin, and maintenance margin work on Liquid perpetual futures. ### Overview When opening a leveraged position on Liquid, you choose a **multiplier** (leverage) and a **margin mode**. The multiplier determines how large a position your collateral controls. The margin mode determines how collateral is allocated and how liquidation risk is shared across positions. Liquid supports the two standard margin modes: * **Cross margin** (shared collateral) * **Isolated margin** (position-specific collateral) Some markets may use venue-specific variations, such as stricter isolated configurations. ### Cross Margin Cross margin uses a shared collateral pool across eligible positions. This means: * Available collateral can support multiple positions at once * Profits from one position can help offset losses in another * Capital usage is generally more efficient than isolated margin Because collateral is shared, a liquidation event in one cross-margined position can affect the collateral available for other cross-margined positions. Cross margin is often preferred by traders who want maximum capital efficiency, a shared risk budget across positions, and the flexibility to deploy unrealized PnL into new trades. ### Isolated Margin Isolated margin assigns collateral to a specific position only. This means: * Risk is contained to that position's allocated margin * Liquidation of one isolated position does not directly impact other isolated positions * Cross margin positions are not affected by isolated position liquidations, and vice versa Isolated margin is commonly used by traders who want clear per-position risk limits, separation between strategies, and precise control over collateral allocation. ### Strict Isolated Mode (market-specific) Some markets support a stricter version of isolated margin. In this mode, margin is isolated to the position, manual margin removal may be restricted while the position is open, and margin may be reduced automatically only as the position is closed. This design helps reduce liquidation risk for certain assets or market structures. ### Multi-venue Margin Behavior Liquid routes markets to multiple execution venues behind a single account. Cross margin generally applies within a venue: positions on the same venue share collateral, while positions on different venues are margined separately. Liquid moves collateral between venues for you when you open a position, and the order ticket always shows the margin that will be used. ### Initial Margin and Leverage Leverage is chosen when opening a position and must remain within the maximum allowed for that market. The margin required to open a position is: `Initial Margin = Position Notional / Leverage` Where position notional is: `Position Notional = Position Size × Mark Price` Important behavior: * Initial margin is reserved for the position and cannot be freely withdrawn while it is supporting risk * Higher leverage reduces the initial margin required, but increases liquidation risk * Maximum leverage varies by market and may also vary by position size (tiered margin systems) ### Adjusting Margin After Opening For **cross margin** positions, collateral is shared at the account level. Unrealized PnL may increase or reduce the margin available for other trades, and adding collateral is done by funding the account. For **isolated margin** positions, you can add margin to reduce liquidation risk, and you can usually remove margin as long as margin requirements remain satisfied. Unrealized PnL is retained within the isolated position unless withdrawn or transferred. ### Leverage After Entry You can adjust the leverage setting on an existing position without closing it. However, the leverage setting and your actual liquidation risk are not the same thing: * Leverage limits are enforced when opening or increasing a position * After the position is live, you are responsible for monitoring risk * If unrealized losses increase, effective leverage rises automatically To manage rising leverage risk, you can reduce or close part of the position, add margin (isolated), or add collateral to the account (cross). ### Unrealized PnL and Margin Transfers Unrealized PnL may be available for withdrawal or transfer, but a minimum margin buffer must remain after any transfer. Remaining margin must still satisfy: `Remaining Margin ≥ max(Initial Margin Required, Minimum Margin Buffer)` "Transferring margin" includes any action that removes collateral outside normal trade execution: withdrawals, transfers to a spot or prediction balance, or removing margin from an isolated position. ### Maintenance Margin Maintenance margin is the minimum collateral required to keep a position open. If margin falls below this threshold, the position becomes eligible for [liquidation](/trading/liquidations.md). Maintenance margin is lower than initial margin and depends on the asset's risk parameters, maximum leverage, and position size tiers. **Cross margin liquidation** is based on total account value (including unrealized PnL) versus the total maintenance margin requirement across open cross positions. **Isolated margin liquidation** is based only on the isolated collateral assigned to that position and the maintenance margin required for it.