# Calculation of Initial Margin and Maintenance Margin

## Initial Margin (IM)

The initial margin refers to the minimum amount of margin required to open a position. Typically, for same position value, the higher the leverage used, less initial margin is required to open one.

Initial Margin = Position Amount \* Entry Price/Leverage

Example：

Trader opens a position of 1 BTC long at 50,000 USDT price, with 50x leverage.

Initial Margin =（1 x 50,000）/ 50 = 1,000 USDT

## Maintenance Margin (MM)

Maintenance margin is the minimum amount of margin required for traders to continue to hold a position. When the margin balance of a position is lower than the maintenance margin, the position will be liquidated. Typically, the greater the value of the position reaches, the higher the maintenance margin rate is. Please refer to the [Kine risk limit table](https://docs.kine.io/library/risk-limit) for the maintenance margin rate corresponding to the different position values.

Maintenance Margin = Maintenance Margin Rate \* Position Value

Example：

Trader opens a position of 1 BTC long at 50,000 USDT price, with 50x leverage.

Initial Margin = 1 BTC x 50,000 x 1/50 = 1,000 USDT\
Maintenance Margin = 1 BTC x 50,000 x 0.8% = 400 USDT

This means, the maximun loss that this postion can bear is 600 USDT（1,000USDT - 400USDT）, position will be liquidated when loss reaches 600 USDT.


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