Margin is the core concept in futures trading -- understanding it is essential for proper risk control. After registering on Binance, it's recommended to learn the fundamentals before starting futures trading.
What Is Margin
Margin is the collateral you deposit when opening a futures position. Through leverage, you only need to put up a fraction of the total position value. For example, with 10x leverage, 100 USDT in margin controls a 1,000 USDT position.
Initial Margin vs. Maintenance Margin
- Initial margin: The minimum margin required to open a position, equal to the position value divided by the leverage multiplier
- Maintenance margin: The minimum margin level that must be maintained while holding a position. Falling below this triggers forced liquidation
The maintenance margin rate is typically 0.4% to 5% of the position value, depending on position size and the specific coin.
Margin Ratio
Margin ratio = Maintenance margin / Account equity
When the margin ratio reaches 100%, liquidation is triggered. You can monitor your margin ratio in real time in the Binance APP -- keeping it below 50% is recommended.
Adding Margin
When the margin ratio approaches the warning level, you can add margin to reduce liquidation risk. In isolated margin mode, you can manually add margin to a specific position. In cross margin mode, the system automatically supplements from the account balance.
Margin Management Tips
- Don't use all your funds as margin; keep a buffer
- Watch for changes in your margin ratio and plan ahead
- During high market volatility, consider reducing positions to lower margin requirements
- Monitor the combined margin situation across multiple positions simultaneously
Download the Binance APP to monitor your margin status in real time.