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Perpetual futures

Initial margin

Updated 2026-10-02 · 7 min read · Not financial advice

Stacked diagram of initial margin on a perpetual, from notional divided by leverage, plus a fee buffer.

Initial margin is the deposit that lets the position exist. It is not the amount you can lose in a price move. It is the amount the venue locks so the position can be opened at that size.

The simple ratio

Divide notional by the leverage you selected. A $10,000 linear notional at 10x requires about $1,000 of initial margin. At 2x the same notional requires about $5,000. The exposure is $10,000 in both cases. Only the locked collateral changed.

Venues add buffers. A fee reserve, an opening loss against the mark, or a minimum order floor can make the locked amount larger than the textbook ratio. The ticket's margin field, after you preview the order, is the number that matters.

Isolated and cross lock it differently

In isolated mode the initial margin is assigned to that position. The rest of the wallet stays outside the position. In cross mode the wallet balance backs the position, and the initial requirement is a threshold the wallet must clear.

Available balance is what remains after open orders and positions have reserved their requirements. An order that looks affordable against the wallet total can still be rejected because the available balance is smaller.

Raising leverage releases margin

Increasing leverage on an open isolated position reduces the initial requirement and can return collateral to the available balance. The liquidation price moves closer at the same time. Traders treat the released collateral as profit. It is borrowed room against the same exposure.

Decreasing leverage demands more collateral. If the wallet cannot spare it, the venue rejects the change. You then need to add balance or reduce the position size.

On the ticket

  1. Compute notional first. Divide by the leverage you intend to use. That quotient is the rough initial margin.
  2. Preview the order and read the margin the ticket will lock. Use the preview if it disagrees with the rough ratio.
  3. Check available balance, not wallet total, before you send a second order.
  4. If you raise leverage to free margin, rewrite the liquidation price in the journal in the same step.

Questions

Is initial margin the most I can lose?

On an isolated position it is close to the cap, plus fees. In cross mode the position can draw on the rest of the wallet. Bankruptcy mechanisms exist for the residual beyond that.

Does the fee come out of initial margin?

The trading fee is charged on the fill. Some tickets reserve it up front so the margin that remains after the fee still covers the requirement.

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