# Understanding margin in perpetual futures

Publicado el 20 jun 2022Actualizado el 4 abr 2024Lectura de 3 min

## Understanding margin

In the crypto derivatives market, margin refers to a percentage of the contract’s value that traders must hold in order to open positions.

## Calculating margin

OKX has two margin modes: cross and isolated.

• Cross margin mode: In cross margin mode, the entire margin balance is shared among all open positions, which can help lower the risk of liquidation.

• Crypto-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier / (Mark price × Leverage)

• USDT-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier × Mark price / Leverage

• Isolated margin mode: In isolated margin mode, each position has its own margin, allowing traders to manage risk per position.

• Crypto-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier / (Average price of open positions × Leverage)

• USDT-margined contracts
Initial margin = Contract size × |Number of contracts| × Multiplier × Average price of open positions / Leverage

## Understanding margin and leverage

Leverage is a trading mechanism that amplifies potential returns and risks by allowing traders to trade with more funds than what they have in their trading account.In cross margin mode, when you are opening long or short positions: Initial margin = Position value / Leverage

• Crypto-margined contracts

• If the current BTC price is \$10,000, the user wants to buy perpetual futures worth 1 BTC with 10x leverage, the Number of Contracts = BTC Quantity x BTC Price / Contract Size = 1 x 10,000 / 100 = 100 contracts.

• Initial Margin = Contract Size x Number of Contracts / (BTC Price x Leverage) = 100 x 100 / (10,000 x 10) = 0.1 BTC

• USDT-margined contracts

• If the current BTC price is 10,000 USDT, the user wants to buy perpetual futures worth 1 BTC with 10x leverage, Number of Contracts = BTC Quantity / Contract Size = 1 / 0.0001 = 10,000 contracts.

• Initial Margin = Contract Size x Number of Contracts x BTC Price / Leverage) = 0.0001 x 10,000 x 10,000 / 10 = 1,000 USDT

## Margin rates and maintenance

• Initial margin: 1 / Leverage

• Maintenance margin: The minimum margin required to sustain the current position.

• Single-currency cross margin mode
Initial margin = (Currency balance + Earnings – Trading volume of pending maker sell orders in the selected currency – Trading volume of pending maker buy options orders in the selected currency – Trading volume of pending isolated margin positions in the selected currency – Trading fees of all maker orders) / (Maintenance margin + Liquidation fee)

• Multi-currency cross margin mode

• Single- and multi-currency isolated margin mode / portfolio margin mode

• Crypto-margined contracts
Initial margin = (Margin balance + Earnings) / (Contract size × |Number of contracts| / Mark price × (Maintenance margin + Trading fee))

• USDT-margined contracts
Initial margin = (Margin balance + Earnings) / (Contract size × |Number of contracts| × Mark price × (Maintenance margin + Trading fee))

## Managing margin calls

Margin calls are unique to isolated margin mode. You can increase the margin of specific positions to better control your risks.