Margining

SoDEX margin calculations are aligned with the standard formulas used by major centralized derivatives exchanges to ensure transparency and efficiency.

Margin Mode

Traders can select a margin mode when opening a position to define how collateral is utilized and risk is managed:

Margin Mode	Description	Risk and Capital Efficiency
Cross Margin (Default)	All available funds in the user's wallet are pooled and shared as collateral across all open positions.	Highest capital efficiency, but a single unprofitable position can lead to the liquidation of the entire account balance.
Isolated Margin	A specific, fixed amount of collateral is allocated to a single position.	Risk is isolated; liquidation results only in the loss of the allocated margin for that specific position, protecting the rest of the account balance.

Initial Margin and Leverage

Leverage allows traders to open positions that are larger than their own capital. The amount of leverage can be selected by the user, up to the maximum leverage allowed for a specific asset, as defined in the Margin Tiers.

The amount of collateral required to open a position is known as the Initial Margin. It is calculated with the following formula:

$$\text{Initial Margin} = \frac{\text{Position Size} \times \text{Mark Price}}{\text{Leverage}}$$

Once a position is open, the initial margin is locked and cannot be withdrawn.

• For isolated positions, traders can manually add more margin to a position to reduce its risk of liquidation.

• For cross margin positions, any unrealized PnL automatically contributes to the account's total margin, which can be used to open new positions.

Maintenance Margin and Liquidations

The Maintenance Margin is the minimum equity required to keep a position active. Failing to meet this requirement triggers liquidation.

Cross Margin Liquidation Logic:

• Triggered when the account's Total Equity (Balance + Unrealized PnL from all cross positions - initial margin from all isolated positions) falls below the sum of the Total Maintenance Margin Requirement for all cross positions.

• The Maintenance Margin requirement is typically set at 50% of the initial margin required when using maximum leverage.

Isolated Margin Liquidation Logic:

• The logic is applied per position.

• A position is liquidated when its allocated margin balance falls below the specific Maintenance Margin requirement calculated only for that single, isolated position.