OCT 4, 2026
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Leverage lets you control a position larger than the collateral you post. Margin is that collateral. The higher the leverage, the smaller the price move that wipes the margin out. This lesson shows the maths, lets you test it, and explains how Aevo’s margin rules differ by product. You can put it to work on Aevo’s perps dex.
IN THIS LESSON
Leverage is position size divided by margin. 10x means a position ten times your margin.
Initial margin opens a position. Maintenance margin is the floor, and falling below it triggers liquidation.
Higher leverage means a smaller move to liquidation.
BTC and ETH perps on Aevo use 5% initial margin (20x maximum) and 3% maintenance margin.
01
What is leverage?
Leverage is the ratio between the size of your position and the margin you post. With 1,000 USDC of margin at 10x leverage, you control a 10,000 USDC position. A 1% move in price is a 10% move in your margin, in either direction.
02
Initial margin and maintenance margin
Initial margin is what you must post to open a position. At 10x it’s 10% of the position’s value.
Maintenance margin is the minimum equity you must keep to hold it. It’s lower than initial margin, and when your equity falls to that level the exchange liquidates the position.
The gap between the two is your buffer. A wider gap gives price more room to move before you’re closed out.
03
How far can price move before liquidation?
In a simplified isolated model with entry price 100 and maintenance margin MM:
A long is liquidated at roughly 100 × (1 − 1/leverage + MM).
A short is liquidated at roughly 100 × (1 + 1/leverage − MM).
At 10x leverage with 3% maintenance margin, a long is liquidated near 93, a 7% fall. At 20x it’s near 98, a 2% fall. At 2x it’s near 53. Try your own numbers.
Where does a leveraged position get liquidated?
Real liquidation prices also move with fees and funding, so treat the calculator as a guide to the shape, not a quote.
04
Cross margin against isolated margin
Isolated margin ring-fences the collateral for each position. A loss can only take the margin assigned to that position.
Cross margin shares one pool of collateral across everything. Free collateral can back any position, which is efficient, but a large loss on one position can draw on the rest.
Aevo uses cross margin across perps and options in one account, with isolated margin on the same account and portfolio margin above $5,000 in assets. OTC trades are outside the regular margin system and happen on mainnet. Unified margin explains the benefits and the trade-offs.
05
Margin rules on Aevo
06
Ways to lower your liquidation risk
Use lower leverage. It’s the single biggest lever.
Keep free collateral. In a cross-margin account, it’s the buffer for every position.
Hedge. An options hedge limits the loss on the position it protects. See hedge perps with options.
Size positions by what you can lose. Work back from the loss you’d accept, not forward from the leverage you want.
A long position at 20x leverage with 3% maintenance margin is closest to liquidation after what move?
At 20x, 100 × (1 − 0.05 + 0.03) is about 98, so roughly a 2% fall reaches liquidation in the simplified model.
Which statement describes cross margin?
Cross margin shares collateral across positions. It's capital efficient, and it means one position's loss can use collateral that backs the others.
WHERE TO GO NEXT
Trading leveraged contracts with no expiry? Aevo runs a decentralized perps exchange with on-chain settlement and 20x on BTC and ETH. Every cost of a trade, from maker and taker fees to funding and liquidation, is in the fees lesson. Not sure how collateral is shared? Read what is unified margin and why a hedge can lower your requirement. New to derivatives? The crypto derivatives guides take you from your first perp to hedging in seven short lessons.
07
Frequently asked questions
What is leverage in crypto trading?
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What is maintenance margin?
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What is the maintenance margin on Aevo?
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What is the difference between cross and isolated margin?
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Can I lose more than my margin?
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Put the lesson to work
Practice on testnet or start small on mainnet.
Launch Exchange ↗
KEEP GOING
LEVEL
BEGINNER
TIME
12 MINUTES
PRIOR KNOWLEDGE
LESSONS 1 AND 2
WORKED EXAMPLES
ILLUSTRATIVE
LEARN / LEVERAGE / MARGIN / LESSON 4
This lesson is for education only and isn’t financial advice. Leveraged products can lose more than you expect, quickly. Worked examples are simplified and use illustrative numbers.