Margin

May 21, 2026 | Updated May 21, 2026

Margin is the collateral a trader deposits to open and maintain a leveraged position, helping cover any potential losses.

What Is Margin in Crypto Trading?

Margin is the collateral you put up to access margin trading (also called leveraged trading). Rather than paying the full value of a position, you deposit a fraction of it as security, and the platform lends you the rest. This allows you to open a position larger than your available capital, amplifying both potential gains and potential losses.

For example, opening a $10,000 position with 10x leverage requires $1,000 in margin. That $1,000 is your skin in the game. If the trade moves against you far enough, your margin is consumed, and the position is liquidated.

Initial Margin Vs. Maintenance Margin

Two margin thresholds matter to leveraged traders. Initial margin is the minimum deposit required to open a position, while the maintenance margin is the minimum balance required to keep it open.

If your position moves against you and your account balance falls below the maintenance margin threshold, you will receive a margin call, a warning to deposit additional funds or reduce your position. If you do not add collateral in time, the position can be liquidated to cover the loss.

How Does Margin Work in Crypto?

Crypto platforms typically offer two margin modes. Cross margin uses your entire account balance as collateral across all open positions. A loss in one position draws from the same pool supporting others, which can increase the risk of broader account losses. Isolated margin caps the collateral assigned to a single position at a fixed amount, limiting losses from that trade to the margin allocated to it.

Leverage magnifies exposure in both directions. In crypto markets, where prices can move sharply within minutes, under-margined positions can be liquidated before a trader has time to respond.

Margin Vs. Spot Trading

While margin trading uses collateral to increase exposure, spot trading means buying an asset outright with funds you own. Spot holders do not face liquidation risk from leverage, while margin traders do, making risk management and position sizing critical.