1. What Is Maintenance Margin Rate?
The maintenance margin rate is the minimum margin ratio required to sustain a position. When the margin ratio falls below this threshold (including liquidation fees), forced liquidation is triggered.
Key Formulas:
- Isolated Margin:
Margin Ratio = (Initial Margin + Unrealized P&L) / Position Value
Position Value = Face Value × Contract Size × Latest Mark Price - Cross Margin:
Margin Ratio = (Balance + Realized P&L + Unrealized P&L) / (Position Value + Pending Order Frozen Margin × Leverage)
👉 Learn how to calculate margin ratios effectively
2. Purpose of Tiered Maintenance Margin Rates
OKX implements this system to:
- Reduce market impact during large-position liquidations.
- Prevent significant insurance fund losses.
- Adjust margin requirements and leverage caps based on position size (larger positions = higher margins + lower max leverage).
3. Calculating Position Tiers
- Isolated Margin: Each contract/direction is evaluated separately.
- Cross Margin: All positions in a contract are aggregated (e.g., 10,000 long + 15,000 short = 25,000 total contracts).
BTC Perpetual Contract Tier Example:
| Tier | Contract Range | Maintenance Rate | Min Initial Margin | Max Leverage |
|---|---|---|---|---|
| 1 | 0–20,000 | 0.50% | 1.00% | 100x |
| 2 | 20,001–22,000 | 1.00% | 1.50% | 66.66x |
| ... | ... | ... | ... | ... |
Example: A 60,000-contract position falls under Tier 4 (2% maintenance rate, 20x max leverage).
FAQ Section
Q1: How does tiering protect traders?
A: It mitigates slippage risks during liquidations and ensures orderly market conditions.
Q2: Can I change my margin tier manually?
A: No—tiers are auto-assigned based on your real-time position size.
Q3: Why does leverage decrease with larger positions?
A: Higher tiers require more collateral to offset systemic risks.
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Key Takeaways
- Core Keywords: Maintenance margin, tiered system, leverage, liquidation, position sizing.
- Always monitor your margin ratio to avoid liquidation.
- Use cross/isolated margins strategically based on your risk tolerance.
This guide simplifies complex margin mechanics—bookmark it for future reference!