Cross and Isolated Margin Rules for Perpetual Positions

Summary

This documentation explains how cross, isolated, strict isolated, and HIP-3 margin modes affect collateral sharing and liquidation exposure. Cross margin pools eligible collateral across positions, with the scope of sharing depending on account abstraction and, for some setups, whether positions are on the same decentralized exchange. Isolated margin confines collateral to a position’s asset; strict isolated mode additionally prevents margin removal, while HIP-3’s no-cross mode permits isolated margin adjustments without cross margin.

It describes initial margin as notional position value divided by leverage, and explains how unrealized profit and loss contributes to margin or may be transferred subject to minimum remaining-margin requirements. Liquidation occurs when account value falls below maintenance requirements; for isolated positions, the calculation uses that position’s margin and notional exposure. The document states that maintenance margin is half the initial margin at maximum leverage. These are platform-specific rules, and maximum leverage varies by asset; users remain responsible for monitoring positions after opening them.

Key ideas

• Cross margin shares eligible collateral, while isolated margin limits liquidation exposure to a position’s allocated collateral.
• Strict isolated positions do not allow margin removal, and HIP-3 also offers a no-cross mode.
• Initial margin depends on position notional and selected leverage, with maximum leverage varying by asset.
• Margin transfers are limited by both an initial-margin requirement and a minimum share of total notional value.
• Liquidation checks compare account or isolated-position value with the applicable maintenance margin.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.