# Margin & Leverage

## Margining Overview

Margin calculations follow standard practices used by major centralized derivatives exchanges.

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**Margin Modes**

When opening a position, users must choose a margin mode:

* Cross Margin (default)

  Collateral is shared across all cross-margin positions, maximizing capital efficiency. Losses or gains from one position can affect others under the same mode.
* Isolated Margin

  Collateral is confined to a single asset. If the position is liquidated, it does not impact other positions — whether cross or isolated. Likewise, losses from elsewhere won’t affect this position.

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**Initial Margin & Leverage**

* Users can set leverage anywhere from 1x up to the asset’s maximum.
* The margin required to open a position is:

  Position Size × Mark Price ÷ Leverage
* In cross margin, the initial margin is locked and cannot be withdrawn.
* In isolated margin, users can adjust margin (add/remove) even after the position is opened.

For cross positions, unrealized PnL can be reused as margin for new positions. For isolated positions, unrealized PnL adds to that position’s margin.

Once a position is open, leverage is not automatically re-evaluated. Users must monitor their risk and can adjust by:

* Closing part or all of the position
* Adding margin (if isolated)
* Depositing USDC (if cross)

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**Maintenance Margin & Liquidation**

* Cross positions are liquidated if your total account value (including unrealized PnL) falls below the maintenance margin, which is 50% of the initial margin at max leverage.
* Isolated positions follow the same logic, but the calculation is limited to the margin and notional value of the individual position only.

[<br>](https://basedapp.gitbook.io/docs/trading/trailing-stop-loss)


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