> For the complete documentation index, see [llms.txt](https://docs.bullpen.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bullpen.fi/trading/margin-and-leverage.md).

# Margin & Leverage

This page covers margin mechanics for perpetual futures trading on Bullpen.

## Collateral

Bullpen uses **USDC** as collateral for perpetual futures on Hyperliquid. Your perps account balance determines how much margin you have available.

## Margin Modes

### Cross Margin

Your entire account balance backs all positions. Unrealized gains from one position can offset unrealized losses from another.

**Pros**:

* More efficient capital use
* Lower liquidation risk for diversified positions
* Profits automatically available as margin

**Cons**:

* One bad position can liquidate your entire account
* Harder to manage risk per trade

### Isolated Margin

Each position has its own dedicated margin. Losses are limited to the margin allocated to that specific position.

**Pros**:

* Risk contained per position
* Liquidation in one position doesn't affect others
* Clearer risk management

**Cons**:

* Less capital efficient
* Must manually allocate margin to each position

## Leverage

Leverage multiplies your exposure relative to your margin.

| Leverage | Margin Required | Liquidation Move |
| -------- | --------------- | ---------------- |
| 1x       | 100%            | \~100%           |
| 5x       | 20%             | \~20%            |
| 10x      | 10%             | \~10%            |
| 25x      | 4%              | \~4%             |
| 50x      | 2%              | \~2%             |

*Liquidation thresholds are approximate. Actual values depend on maintenance margin requirements.*

### Maximum Leverage

Max leverage varies by asset:

* **BTC, ETH**: Up to 50x
* **Major alts**: Typically 20-50x
* **Smaller assets**: Often 5-20x

Check the trading interface for the specific max leverage on each asset.

### Adjusting Leverage

You can change leverage for a position at any time:

1. Open the position details
2. Click the leverage selector
3. Choose new leverage level

Increasing leverage reduces your margin buffer. Decreasing leverage requires additional margin (or closes part of your position if insufficient).

## Margin Requirements

### Initial Margin

The minimum margin required to open a position.

```
Initial Margin = Position Size / Leverage
```

### Maintenance Margin

The minimum margin required to keep a position open. If your margin falls below this level, you get liquidated.

Maintenance margin is typically lower than initial margin, giving you a buffer.

### Margin Ratio

```
Margin Ratio = Account Equity / Position Value
```

When your margin ratio falls below the maintenance requirement, liquidation begins.

## Adding Margin

To reduce liquidation risk on an existing position:

1. Transfer more USDC to your perps account
2. Close other positions to free up margin
3. Reduce position size

In isolated margin mode, you can also add margin directly to a specific position.

## Liquidations

When margin ratio drops below maintenance:

1. Liquidation engine takes over
2. Position is closed at mark price
3. Remaining margin (if any) returns to your account
4. If underwater, losses are socialized via ADL

For liquidation mechanics, see [Hyperliquid Docs: Liquidations](https://hyperliquid.gitbook.io/hyperliquid-docs/trading/liquidations).

## Risk Management Tips

* Start with lower leverage until you understand the mechanics
* Always use stop losses
* Don't use your entire balance as margin
* Monitor positions during high volatility
* Understand funding rate exposure on longer holds


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