Initial Margin
The upfront collateral required to open a leveraged position.
What is Initial Margin?
Initial margin on a Perp DEX is the amount of collateral a trader must deposit to open a leveraged position in a perpetual swap. For example, if Hyperliquid requires a 10% initial margin for a 10x leveraged $10,000 BTC position, the trader must deposit $1,000 in stablecoins or other assets to initiate the trade.
The initial margin is higher than the maintenance margin and acts as a buffer against market volatility. It is locked in a smart contract and monitored in real-time. If losses reduce the margin below the maintenance threshold, liquidation occurs unless the trader adds more funds. Initial margin requirements vary by platform and leverage level.
Related Terms
Transfer Bitcoin and Transaction
A Bitcoin transaction is a digitally signed transfer of digital assets (BTC) between addresses on the bitcoin blockchain.
CBDC
A central bank-issued digital currency designed to function as legal tender.
Double Spend
Attempting to spend the same digital asset more than once in a blockchain network.
Circulating Supply
The total number of a digital asset's tokens or coins that are publicly available and actively circulating in the market.
Bid-Ask Spread
The difference between the highest bid price and the lowest ask price in an order book, indicating market liquidity.
Lending Aggregator
A platform that sources the best lending or borrowing rates across multiple DeFi protocols.