Margin

Margin is the trader’s own capital locked as collateral for a leveraged position. Conceptually the same as collateral in lending, but in the context of perpetuals or margin trading.

Margin types

• Initial margin (IM). Minimum required to open a position. At 10x, IM ≈ 10% of notional; at 50x, 2%; at 100x, 1%.
• Maintenance margin (MM). Minimum equity-to-notional ratio for keeping the position open. Usually 0.5–1% of notional. Fall below and liquidation fires.
• Free margin. Unused capital in the account.

Margin ratio and health

The key risk indicator:

margin ratio = equity / notional

Equity = margin + unrealised P&L. When MR drops to MM — liquidation trigger.

Most interfaces show liquidation price directly: the price at which margin ratio reaches MM.

Cross vs Isolated margin

• Cross. All account funds form one margin pool. A winning position can subsidise a losing one — and a losing position can drain everything else.
• Isolated. Margin is pinned to each position; one liquidation does not touch the rest.

Isolated is the safer default for retail. Cross fits arbitrage and delta-neutral strategies that depend on cross-position offsetting.

Margin call

Traditional brokers issue a margin call (“top up or we close it”). Crypto has effectively none: liquidation is automatic. The closest analogue is wallet/exchange push notifications as liquidation price approaches.

On TON DeFi

Storm Trade defaults to isolated margin: each TON / BTC / ETH position has its own margin allocation. Liquidator bots watch the health factor and close positions when they breach the threshold.

What matters

• Less margin = higher leverage at the same notional = higher liquidation risk.
• Topping up margin is safer than scaling the position.
• Watch the gap between current price and liquidation price, not just current P&L.
• Do not conflate position margin and wallet balance — separate concepts on a CEX or a DeFi perp.

Margin is your own risk capital. At high leverage the only thing standing between your position and zero is the size of the margin and the health of the trade.