What is maintenance margin on Kraken?

Understanding Maintenance Margin on Kraken

When trading with leverage on Kraken Futures, the concept of maintenance margin is crucial for managing risk and avoiding forced liquidations. Unlike initial margin—which is the amount required to open a leveraged position—maintenance margin is the minimum amount of equity that must remain in your margin account to keep that position open. If your account equity falls below this threshold due to adverse price movements, Kraken may trigger a margin call or automatically liquidate part or all of your position to cover the shortfall.

This mechanism protects both traders and Kraken from negative balances. It’s important to understand that maintenance margin is not a fixed dollar amount—it’s a percentage of the total position value, and it varies depending on the asset and leverage used.

How Kraken Calculates Maintenance Margin

Kraken uses a tiered system to determine maintenance margin requirements, which means the percentage changes based on the size of your position. For example, smaller positions may have a lower maintenance margin percentage (e.g., 0.5%), while larger positions might require 2% or more. You can find the exact maintenance margin rates for each futures contract in Kraken’s official documentation under “Margin Requirements.”

To calculate your maintenance margin:

• Multiply your position size (in USD) by the maintenance margin rate for that asset
• The result is the minimum equity you must maintain to avoid liquidation

For instance, if you hold a $10,000 BTC/USD futures position with a 1% maintenance margin rate, you must maintain at least $100 in equity in your margin account. If your equity drops below $100—due to losses—you’re at risk of liquidation.

How to Check Your Maintenance Margin Status on Kraken

To monitor your maintenance margin in real time:

• Log in to your Kraken account
• Navigate to the Futures tab
• Select the specific position you want to inspect
• Look for the “Maintenance Margin” field in the position details

  This value updates dynamically as the market moves and your unrealized P&L changes. Kraken also displays your margin utilization ratio, which indicates how close you are to the maintenance threshold. A ratio above 100% means you’re below maintenance margin and at risk of liquidation.

  You can also use Kraken’s API to retrieve this data programmatically:

  • Call the /private/GetOrders endpoint
  • Parse the marginRequirements object
  • Extract the maintenanceMargin value for each open position

  This is especially useful for algorithmic traders who want to set automated alerts or close positions before liquidation occurs.

  What Happens When You Breach Maintenance Margin?

  If your account equity falls below the maintenance margin level:
• Kraken will issue a margin call, which is an automatic notification
• You must either deposit additional funds or reduce your position size immediately
• If no action is taken, Kraken will begin partial or full liquidation of your position

  Liquidation is executed at the prevailing market price, which may result in slippage and further losses. Kraken uses a liquidation engine that prioritizes minimizing impact on the market while closing positions efficiently. The process is transparent—you’ll receive an email and in-app notification once liquidation begins.

  It’s important to note that Kraken does not charge extra fees for liquidation, but you may incur losses due to adverse pricing during the execution. This is why monitoring your maintenance margin is essential for risk management.

  Strategies to Stay Above Maintenance Margin

  To avoid liquidation and maintain healthy margin levels:
• Use lower leverage to reduce your maintenance margin requirement
• Set stop-loss orders to automatically close positions before equity drops too low
• Regularly monitor your margin utilization ratio and add funds if it approaches 90%
• Avoid holding large positions overnight or during high-volatility events like CPI releases

  You can also enable Kraken’s Auto-Deleveraging (ADL) feature, which reduces your position size gradually instead of liquidating it all at once. This gives you more time to respond and potentially avoid total loss.

  For advanced users, integrating a third-party risk management tool (like a custom script or dashboard) can help track maintenance margin across multiple positions in real time. This is particularly useful for portfolio margin accounts.

  Frequently Asked Questions

  What is the difference between initial margin and maintenance margin on Kraken?Initial margin is the amount required to open a leveraged position, while maintenance margin is the minimum equity needed to keep it open. Maintenance margin is typically lower than initial margin but acts as a safety net.

  Can I add funds to my margin account after breaching maintenance margin?Yes. If you receive a margin call, you can deposit funds into your margin wallet immediately to restore your equity above the maintenance threshold and avoid liquidation.

  Does maintenance margin change during the trade?Yes. If your position size changes due to partial closes or if Kraken adjusts margin requirements for the asset (e.g., during high volatility), the maintenance margin will update accordingly.

  Is maintenance margin the same for all futures contracts on Kraken?No. Each futures contract (e.g., BTC/USD, ETH/USD) has its own maintenance margin rate, which Kraken sets based on volatility, liquidity, and risk profiles. Always check the specific rate before opening a position.