Maintenance Margin: Ever heard the term but not quite sure what it means?
Let's dive into the details and unpack this essential concept that every trader should understand.
Here's what you need to know:
The maintenance margin refers to the minimum collateral the trader must have to keep their position open.
The maintenance margin is dynamic - so keep a close eye on it as the spot price of your collateralized asset and the spot price of the asset you’re speculating on changes, as well as your other positions (since their negative PnL will impact your maintenance margin).
Your margin falling below the maintenance margin leads to liquidations.
Hubble Exchange is a cross-margin perpetual futures protocol. This means PnL from profitable positions is used as collateral for other positions in the account.
This unlocks greater capital efficiency and can help keep your position's margin requirements. But traders must also be careful because in the same way that a winning position improves the margin, a losing position can put the whole account at risk.
