Maintenance Margin is the minimum margin required to continue holding a position. For XT.COM perpetual contracts, the maintenance margin base rate is 0.5% (BTC) or 1 (ETH and XRP) of the contract value when opening a position. It will increase or decrease accordingly as risk limit changes.
Liquidation occurs when the position margin is less than its maintenance margin level.
A trader buys 10,000 BTCUSD contracts at 30,000 USD with 50x leverage.
The isolated margin for this position is:
Initial Margin = 10,000 / (30,000 * 50)
= 0.00667 BTC
Maintenance Margin = (Contract Quantity / Opening Price) × Maintenance Margin Rate
Maintenance Margin = (10,000 / 30,000) × 0.5% = 0.00167 BTC
This means that this position could take an unrealized loss of up to 0.005 BTC (Initial Margin - Maintenance Margin) before the occurrence of liquidation. It is thus very important for traders to be constantly aware of the margin level on their positions.