Maintenance Margin

Maintenance margin is the safety floor under a leveraged position. It is the minimum amount of equity, measured as a percentage of the position's notional value, that you must keep in the position to avoid liquidation. As long as your equity stays above this floor, the position survives. The moment it touches the floor, liquidation begins.

What it actually means

There are two margin numbers to keep straight. Initial margin is what you must post to open a position, and it is set by the leverage you choose. Maintenance margin is the smaller amount you must keep in the position to hold it open. Initial margin is always higher than maintenance margin, and the gap between them is the buffer you have before a losing position is forced closed.

How it is calculated

Maintenance margin is defined as a ratio of position notional. Your account equity for the position is your margin plus or minus unrealized profit and loss. As the price moves against you, unrealized loss eats into your equity. When equity falls to the maintenance margin requirement, the position is liquidated.

In practice this means the maintenance margin ratio sets how far the price can move against you before you are liquidated. A larger ratio gives you a wider safety buffer; a smaller ratio, common with high leverage, gives you very little room.

Why it matters to you

• It defines your liquidation price: the distance from entry to liquidation is governed by the maintenance margin ratio and your leverage.
• It explains why high leverage is fragile: a low maintenance ratio means a small adverse move wipes out your buffer.
• Adding margin raises your equity and pushes the liquidation price further away, buying you room.
• Unrealized loss and funding payments both reduce equity, so both can move you toward the maintenance floor.

Real example

Suppose you open a $10,000 long with 10x leverage, posting $1,000 of margin. If the maintenance margin ratio is 3 percent, the maintenance requirement is about $300 on the $10,000 notional. Your $1,000 of equity can absorb roughly $700 of loss before it drops to that $300 floor. On a $10,000 position, about a 7 percent adverse price move erases that buffer and triggers liquidation. These numbers are illustrative; actual ratios vary by asset and leverage.

Common misconceptions

• "Maintenance margin and initial margin are the same." Initial margin opens the position; maintenance margin keeps it open and is lower.
• "I get liquidated when my margin hits zero." You get liquidated when equity hits the maintenance requirement, which is above zero.
• "Liquidation price never changes." It moves whenever you add or remove margin, and unrealized PnL shifts how close you are to it.
• "More leverage just means more exposure." It also lowers your effective buffer, moving the maintenance floor closer to your entry.

How Otomato monitors it

Otomato detects your leveraged Hyperliquid positions automatically from your wallet, with zero setup, and tracks how close your equity is to the maintenance margin requirement. Rather than asking you to watch a liquidation price all day, it sends a low-noise alert only when the mark price approaches that floor, when a position is genuinely at risk, or when an order fills. If you hear nothing, your buffer is intact and no action is required.

Monitor this in your portfolio

Otomato detects your positions automatically and alerts you only when something material changes. No setup, no signatures.

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