When traders talk about liquidation, most think of leverage first: "At 10x, a 10% move gets me liquidated." That's only half true. The actual trigger for liquidation is maintenance margin — and it means your real buffer is almost always smaller than the naive math suggests.
The simple definition
Maintenance margin (MM, or MMR for the rate) is the minimum amount of collateral an exchange requires to keep a position open. If your available margin falls below this value, the position gets closed automatically — whether you want it to or not.
The difference from initial margin (what you deposit when opening the position) is key: initial margin is always higher than maintenance margin. Your buffer to liquidation lives entirely in that gap.
Why it rises with position size
Most exchanges use a tiered system: the larger your position, the higher the maintenance margin rate — and the lower the maximum allowed leverage. A small BTC position might still trade at 125x on some exchanges; the same exchange might only allow 20x for a million-dollar position, with a correspondingly higher MMR.
The reason: larger positions are riskier for the exchange to liquidate, since forced selling can move the market more. The higher MMR is the price for that added risk.
1 / leverage − maintenance margin rate — not simply 1 / leverage.A worked example
At 75x leverage, the naive math gives you 1.33% of movement tolerance. If the maintenance margin rate for your tier is 0.65%, only about 0.68% is actually left — roughly half. At higher leverage the effect gets proportionally worse, because MMR tends to climb alongside position size in tiered systems.
What to take away
- Your actual buffer is always smaller than
1/leveragealone. - MMR differs by exchange, token, and position size — there's no single universal number.
- Meme coins and niche tokens tend to carry higher MMR rates than BTC or ETH.