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Every position on Ascend is backed by margin. Margin is the capital you commit to a trade. It enables leveraged exposure, absorbs losses, and defines the boundary of your risk. Understanding margin is essential to managing positions effectively.

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How Margin Works

When you open a position, you post margin as collateral. This margin serves three purposes:
  • Enables leveraged exposure to probability movement
  • Absorbs unrealized losses as prices move against you
  • Defines the maximum you can lose on the trade
The more margin you post relative to your position size, the more room your position has to absorb adverse price movement.

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Initial Margin

Initial Margin (IM) is the capital required to open a position. It is determined by your position size and selected leverage: 
Initial Margin = Position Notional / Leverage
Example: You want to open a 1,000 USDC notional position at 10x leverage. 
Initial Margin = 1,000 / 10 = 100 USDC
You post 100 USDC to control 1,000 USDC of exposure.

Lower leverage (5x)

1,000 USDC position requires 200 USDC margin. More cushion against adverse moves.

Higher leverage (20x)

1,000 USDC position requires only 50 USDC margin. Less room for error.

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Maintenance Margin

Maintenance Margin (MM) is the minimum equity required to keep a position open. It is defined as a fraction of your position notional: 
Maintenance Margin = Maintenance Rate × Position Notional
The maintenance rate is set per market, typically between 1% and 5%. Example: Your position has 1,000 USDC notional. The market has a 2.5% maintenance rate. 
Maintenance Margin = 0.025 × 1,000 = 25 USDC
As long as your equity stays above 25 USDC, your position remains open. If equity drops to or below this level, liquidation may be triggered.

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Position Equity

Your position equity represents the real-time value of your position. It fluctuates constantly as prices move. 
Equity = Initial Margin + Unrealized PnL − Accrued Funding
Where:
  • Initial Margin is what you posted when opening the position
  • Unrealized PnL changes as the Mark Price moves
  • Accrued Funding is the net funding paid or received
Example: Price moves in your favor You open a LONG position with 100 USDC margin. The probability moves up, generating +30 USDC unrealized PnL. You have paid 2 USDC in funding. 
Equity = 100 + 30 − 2 = 128 USDC
Your position equity is now 128 USDC. Example: Price moves against you Same position, but the market moves against you by 30 USDC instead: 
Equity = 100 + (−30) − 2 = 68 USDC
Your equity dropped to 68 USDC.

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Margin Ratio

The margin ratio shows how healthy your position is relative to the liquidation threshold: 
Margin Ratio = Equity / Maintenance Margin
Margin RatioStatus
> 2.0Healthy. Comfortable buffer.
1.5 to 2.0Caution. Monitor closely.
1.0 to 1.5Warning. Consider adding margin or reducing position.
≤ 1.0Liquidation zone. Position may be closed.
Example: Your equity is 68 USDC. Maintenance margin is 25 USDC. 
Margin Ratio = 68 / 25 = 2.72
You are in healthy territory. But if equity drops to 30 USDC: 
Margin Ratio = 30 / 25 = 1.2
Now you are in the warning zone. Time to consider adding margin or reducing your position.

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Isolated Margin

Ascend uses isolated margin at the position level. This means:
  • Each position has its own margin
  • Risk is fully contained within each position
  • One position cannot draw collateral from another
  • Losses on one position do not affect others
Example: You have two positions:
PositionMarginStatus
BTC directional LONG100 USDCHealthy
Election outcome SHORT50 USDCNear liquidation
If the election position gets liquidated, you lose at most 50 USDC. Your BTC position is completely unaffected. This isolation makes risk predictable. You always know the maximum you can lose on each trade.

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Leverage and Risk Relationship

Higher leverage means:
  • Less margin required to open the same position
  • Greater sensitivity to price movement
  • Liquidation price closer to entry price
  • Less room for the market to move against you
LeverageMargin for 1,000 USDC PositionPrice Move to Liquidation
5x200 USDC~17.5%
10x100 USDC~7.5%
20x50 USDC~2.5%
The numbers above assume a 2.5% maintenance rate. Actual liquidation prices depend on market parameters.

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Managing Your Margin

You can actively manage margin on open positions:
Deposit additional margin to increase your equity buffer. This moves your liquidation price further away from the current price.When to use: Your position is under pressure but you believe the market will reverse.
Withdraw excess margin from a profitable position. This frees up capital for other trades.When to use: Your position is healthy and you want to deploy capital elsewhere.
Close part of your position to lower your maintenance margin requirement and improve your margin ratio.When to use: You want to reduce risk without closing entirely.

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Risk Parameters by Market

Each market defines its own margin parameters:
ParameterDescriptionTypical Range
Maximum LeverageHighest allowed leverage5x to 50x
Maintenance RatePercentage of notional for MM1% to 5%
Minimum Position SizeSmallest allowed positionVaries
These parameters are set at market creation and visible to all traders. Higher volatility markets typically have lower maximum leverage and higher maintenance rates.

Next: Liquidation Logic

Learn when and how positions get liquidated