> For the complete documentation index, see [llms.txt](https://docs.nexus.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.nexus.xyz/exchange/trading/perpetuals/margining.md).

# Margining

Margin is enforced **natively inside the exchange engine** and verified atomically before any order is accepted. Margining is **whole-account (cross)**: your entire USDX balance is the collateral pool backing every open position. Per-market isolated margin is planned for a later release.

### Definitions

| Term                   | Meaning                                                                             |
| ---------------------- | ----------------------------------------------------------------------------------- |
| **Notional**           | `position_size × mark_price` — the value of the position at the current mark price. |
| **Equity**             | Account balance + unrealized PnL across all positions.                              |
| **Initial margin**     | Collateral required to *open or increase* a position.                               |
| **Maintenance margin** | Minimum collateral required to *keep* a position open.                              |

### Initial margin

Initial margin is the notional scaled by the market's initial margin rate:

```
initial_margin = position_size × mark_price × initial_margin_rate
```

Equivalently, `initial_margin_rate = 1 / max_leverage`. The engine sums the initial margin required across all positions and rejects an order if your equity cannot cover it.

### Maintenance margin

Each market defines its own **maintenance margin rate** — a configured fraction of notional, not a value derived from leverage at request time:

```
maintenance_margin = position_size × mark_price × maintenance_margin_rate
```

The maintenance margin rate is always **less than or equal to** the initial margin rate (the engine rejects any configuration where maintenance exceeds initial). A position becomes eligible for liquidation when account equity falls below the total maintenance margin across all positions:

```
liquidatable when:  equity < Σ maintenance_margin
```

> **Current testnet values.** Every market currently runs a deliberate **flat 2% margin profile** — `initial_margin_rate = maintenance_margin_rate = 0.02`, which corresponds to **up to 50x** maximum leverage. These are per-market configurable and will be tuned per market in later gates. See Market Specifications for the live per-market values.

### Why mark price, not last price

All margin calculations use the mark price — an external index price — rather than the last trade on the book. This prevents a single thin-book trade from pushing an account into liquidation.


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