Margin System
Maintenance margin is a critical risk management mechanism designed to prevent excessive losses and protect the overall stability of the AZX trading system.
What Is Maintenance Margin
Maintenance margin is the minimum amount of margin that must be maintained to keep a position open. If unrealized losses cause a position’s margin to fall below this threshold, the position becomes eligible for liquidation.
Unlike initial margin, which determines how large a position can be opened, maintenance margin determines how much loss a position can sustain.
Tiered Risk Framework
AZX applies a tiered risk framework to maintenance margin requirements. As a position’s notional value increases, the required maintenance margin rate also increases.
Each trading pair defines multiple risk tiers. Each tier specifies:
Position notional range
Maximum leverage
Maintenance margin rate
This design limits systemic risk by ensuring that larger positions require proportionally more collateral.
Example Risk Tier Structure (BTCUSDT)
LV1
0 – 1,000,000
125×
0.40%
LV2
1,000,000 – 2,000,000
100×
0.50%
LV3
2,000,000 – 5,000,000
75×
0.67%
LV4
5,000,000 – 10,000,000
50×
1.00%
LV5
10,000,000 – 80,000,000
25×
2.00%
LV6
80,000,000 – 100,000,000
20×
2.50%
LV7
100,000,000 – 150,000,000
10×
5.00%
LV8
150,000,000 – 200,000,000
8×
6.25%
LV9
200,000,000 – 300,000,000
5×
10.00%
As positions move into higher tiers:
Maximum leverage decreases
Maintenance margin requirements increase
Liquidation risk rises more rapidly
Maintenance Margin Calculation
Definitions
Position Value = Contract Quantity × Mark Price
Initial Margin (IM) = Position Value ÷ Leverage
Maintenance Margin (MM) = Position Value × Maintenance Margin Rate
Example Calculation
Assume:
Mark Price = 120,000 USDT
Position Size = 10 BTC
Leverage = 50×
Position Value = 10 × 120,000 = 1,200,000 USDT
Initial Margin = 1,200,000 ÷ 50 = 24,000 USDT
Maintenance Margin = 1,200,000 × 0.5% = 6,000 USDT
This position can sustain:
24,000 − 6,000 = 18,000 USDT
in unrealized losses before liquidation is triggered.
Maintenance Margin and Risk Management
Traders should closely monitor:
Margin ratio
Liquidation price
Position size relative to risk tiers
Maintaining adequate margin reduces liquidation risk, particularly during periods of high volatility.
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