> For the complete documentation index, see [llms.txt](https://sodex.com/documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sodex.com/documentation/trading-mechanics/margining-legacy.md).

# Margining (Legacy)

Margin calculations closely mirror the formulas utilized by centralized derivatives exchanges.

## Margin Mode

When opening a position, a margin mode must be selected. Cross margin (default) utilizes shared collateral across all cross-margin positions for maximum capital efficiency. An isolated margin restricts collateral allocation to the specific asset, ensuring liquidation:

* In isolated positions, the margin doesn't affect cross/other isolated positions.
* In cross/other isolated positions, the margin doesn't affect this isolated position
* Isolated margin only supports USDC as collateral, and PNL can be offset within positions using the same asset.
* Cross margin supports multiple assets (USDC, BTC, ETH) as collateral, and PNL can be offset across them.

## Initial Margin and Leverage

Users may select leverage as any integer between 1 and the asset-specific maximum leverage. Position margin requirements are calculated as: `Initial Margin = Position Size × Mark Price ÷ Leverage`

* Cross Margin:
  * Initial margin is locked and non-withdrawable
  * Unrealized PNL automatically serves as available margin for new positions
* Isolated Margin:
  * Supports post-opening margin adjustments (add/remove)
  * Unrealized PNL applies as an additional margin to the open position

## Unrealized PNL and transfer margin

Unrealized PNL withdrawal from isolated positions or cross accounts follows the following formulas:

* initialMargin = entryPrice \* positionSize / leverage
* floatingMargin = isolatedMargin - initialMargin
* floatingProfit = calculateFloatingProfitAndLoss(...)
* availableSubtractMargin = max(0, min(floatingMargin, floatingMargin + floatingProfit))

'Transfer' encompasses any non-trading margin removal, including:

* External withdrawals
* Transfers to spot wallets
* Isolated margin position transfers

## Maintenance Margin & Liquidation Mechanics

Cross positions trigger liquidation when: `Account Value (incl. unrealized PNL) < Maintenance Margin × Total Open Notional Position`Maintenance Margin = Position value \* mainMarginRateThe value of mainMarginRate in various symbols is different. For example, when you open a position below maxNominalValue of 12,500,000 USDC under BTC\_USDC, then the mainMarginRate is 0.004. The current Maintenance Margin Rate (mainMarginRate) on SoDEX Testnet for different symbols is consistent, as follows (Updated on 2025.08.01):

| Bracket | Max Nominal Value (USDC) | Maint Margin Rate | Start Margin Rate | Max Leverage | Min Leverage |
| ------- | ------------------------ | ----------------- | ----------------- | ------------ | ------------ |
| 1       | 10,000,000               | 0.30%             | 0.50%             | 200x         | 1x           |
| 2       | 12,500,000               | 0.40%             | 0.80%             | 125x         | 1x           |
| 3       | 20,000,000               | 0.50%             | 1.00%             | 100x         | 1x           |
| 4       | 25,000,000               | 1.00%             | 2.00%             | 50x          | 1x           |
| 5       | 50,000,000               | 2.50%             | 5.00%             | 20x          | 1x           |
| 6       | 100,000,000              | 5.00%             | 10.00%            | 10x          | 1x           |
| 7       | 200,000,000              | 10.00%            | 20.00%            | 5x           | 1x           |
| 8       | 400,000,000              | 12.50%            | 25.00%            | 4x           | 1x           |
| 9       | 1,500,000,000            | 15.00%            | 33.30%            | 3x           | 1x           |
| 10      | 2,000,000,000            | 25.00%            | 50.00%            | 2x           | 1x           |
| 11      | 5,000,000,000            | 50.00%            | 100.00%           | 1x           | 1x           |

Isolated positions follow identical liquidation logic, with computation inputs solely comprising:

* Isolated margin balance
* The isolated position's notional value