# Margin
Margin refers to the collateral required to open and maintain a position in a perpetual futures contract. A trader must have a sufficient amount of margin in their account to maintain a position. In the event of price fluctuations, if the margin falls below a certain level, the trader may their account. In case of price fluctuations, if margin falls below a certain level, traders must add more collateral to avoid liquidation. Liquidation occurs when margin falls below the maintenance margin level.
Example: In GooseFX DEX, Alice wants to open a long position in Bitcoin worth $1000. Alice must have a margin of 10% of the opened position, which in this case is $100. To open the position, Alice must deposit $100 as collateral to ensure she can cover any potential losses. The leverage used in this example is 10, meaning Alice can control $1000 worth of Bitcoin with only $100 of collateral.
As the price of Bitcoin changes, the value of Alice's position also changes. If the price of Bitcoin decreases and Alice's margin falls below the liquidation level, GooseFX DEX will automatically close Alice's position to protect against further losses. This is known as liquidation, and Alice will lose the remaining value of her margin.
| Perpetuals | Initial Margin (Margin Ratio / Leverage) | Maintenance Margin (Margin Ratio / Leverage) |
|---|
| SOL-PERP | 10% / 10x | 5% / 20x |
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