What are Bybit's initial margin and maintenance margin requirements?

Understanding Bybit's Margin Structure

1. Bybit operates a tiered margin system that varies depending on the trading pair, contract type, and leverage selected. Initial margin refers to the amount of funds required to open a leveraged position. This value is calculated by dividing the position size by the chosen leverage. For example, opening a $10,000 position at 10x leverage requires an initial margin of $1,000.

2. Maintenance margin is the minimum amount of equity that must remain in a position to avoid liquidation. On Bybit, this value is typically set between 0.5% and 1% of the position value for most perpetual contracts. The exact percentage depends on the asset class and risk profile. Higher-volatility assets such as altcoins often require higher maintenance margins compared to major pairs like BTC/USDT.

3. These margin requirements are dynamically adjusted based on market conditions and outstanding open interest. During periods of high volatility, Bybit may temporarily increase maintenance margin thresholds to mitigate systemic risk. Traders receive real-time updates through the platform interface when such adjustments occur.

4. The platform supports both isolated and cross-margin modes. In isolated mode, the initial and maintenance margins are fixed at the time of position entry. Cross-margin mode uses the entire available balance in the wallet to meet margin obligations, which can reduce the likelihood of liquidation but increases exposure across all positions.

Leverage Tiers and Their Impact on Margin

1. Bybit offers variable leverage ranging from 1x to 100x, depending on the product. Each leverage level corresponds to a predefined initial margin requirement. At 100x leverage, the initial margin drops to just 1% of the position size, making it highly sensitive to price movements.

2. Higher leverage not only reduces the initial capital needed but also increases the liquidation risk due to tighter maintenance margin buffers. A position opened at 50x leverage will face liquidation faster than one at 10x under identical adverse price movement.

3. The platform implements a progressive maintenance margin scale where higher leveraged positions have proportionally larger maintenance requirements. This design discourages excessive risk-taking while maintaining market stability.

4. Users can adjust their leverage before entering a trade, which directly affects both initial and maintenance margin values displayed in the order confirmation window. These figures update in real time as the user modifies leverage or position size.

Risk Management Mechanisms on Bybit

1. When a position’s equity falls below the maintenance margin threshold, Bybit triggers automatic liquidation. Before reaching that point, users receive margin calls if they are operating in isolated mode and their margin ratio approaches critical levels.

2. Insurance funds are maintained by Bybit to cover losses from deeply underwater positions. These funds are sourced from a portion of traders’ realized profits and act as a buffer during extreme market moves.

3. Traders should monitor their margin ratio closely, especially during high-volatility events such as macroeconomic announcements or flash crashes. Real-time margin data is accessible via the positions tab, including current maintenance margin, estimated liquidation price, and available balance for top-ups.

4. Partial liquidations may occur in cross-margin mode when multiple positions share the same wallet balance. The system closes portions of losing trades to restore the overall account above the maintenance threshold.

Funding Rates and Their Influence on Margin Usage

1. Perpetual contracts on Bybit include periodic funding payments that can affect net margin usage over time. Long positions pay shorts when funding rates are positive, reducing available margin for long holders.

2. Extended holding periods amplify the impact of funding fees, which must be factored into total cost calculations. High funding environments can erode margin balances even without adverse price action.

3. Funding rate fluctuations often correlate with premium/discount levels between spot and futures prices, influencing trader behavior and margin allocation strategies. Monitoring these rates helps anticipate shifts in market sentiment and potential margin pressure.

4. Positions held across funding timestamps are automatically debited or credited based on the prevailing rate. This process occurs every 8 hours and is reflected instantly in the wallet balance and margin status.

Common Questions About Bybit Margin Requirements

What happens if my position gets liquidated?Upon liquidation, Bybit closes the position at the mark price. If the closure doesn't fully cover the loss, the insurance fund absorbs the deficit. Users lose their initial margin but are not liable for additional amounts beyond that.

Can I add more margin after opening a position?Yes, users can manually increase margin in isolated mode through the 'Add/Reduce Margin' function. This action raises the initial margin and adjusts the liquidation price favorably.

How does Bybit calculate the liquidation price?The liquidation price is derived from the entry price, leverage, fees, and maintenance margin rate. It represents the mark price level at which the position’s equity equals the maintenance requirement.

Are margin requirements different for USDC and Unified Trading Accounts?Yes, USDC contracts operate under a separate margining system with distinct collateral handling. Unified accounts consolidate multiple assets for margin purposes, altering how maintenance thresholds are applied across positions.