Key mechanics: margin, open interest, and mark price

Initial margin and maintenance margin

Initial margin is the collateral required to open a position. Maintenance margin is the minimum equity required to keep it open. If losses reduce your account equity below the maintenance margin threshold, the exchange will liquidate the position automatically.

Most platforms use two margin modes: isolated margin (where only the margin allocated to a single position is at risk) and cross margin (where available account balance is used to prevent liquidation across all positions).

Open interest in crypto perpetuals

Open interest (OI) is the total value of all outstanding perpetual positions that have not been settled or closed. Rising open…