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
SegWit (Segregated Witness)
SegWit (Segregated Witness) is a Bitcoin protocol upgrade that separates signature data from transaction data to increase block capacity and improve transaction malleability.
Fee Tier
The percentage fee charged on DEX trades, set by liquidity pools and distributed to liquidity providers, varying by pool type and volatility.
Ethereum (ETH)
A decentralized blockchain platform that pioneered smart contracts, enabling programmable money and decentralized applications.
Fixed Income Security
Debt instruments providing regular interest and principal repayment, like bonds.
Ethereum Wallet
A software or hardware tool that manages Ethereum accounts, enabling users to store, send, and receive ETH or tokens.
Don't Trust, Verify
"Don't Trust, Verify" is a core principle in blockchain technology, emphasizing that users should independently validate transactions and data on the network rather than relying on intermediaries.