> For the complete documentation index, see [llms.txt](https://docs.yellow.pro/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.yellow.pro/perpetual-trading/margin-and-leverage.md).

# Margin & Leverage

Yellow\.pro uses **cross margin** for perpetual trading, combined with adjustable **leverage**. Understanding how they interact is key to managing risk.

## Cross Margin

In **cross margin** mode your **entire available Perpetual account balance** acts as collateral for all open positions — they share one margin pool. This is the margin mode used on Yellow\.pro.

* A profitable position can provide buffer for a losing one.
* A single heavily losing position can draw from your whole balance.
* Liquidation triggers when your **total** account margin ratio hits the maintenance threshold — not per individual position.

> **Example:** a long BTC position up +200 USDT and a short BTC position down −150 USDT net to +50 USDT. Cross margin considers the whole account, so the losing leg isn't liquidated on its own.

|                       | Cross Margin                   | Isolated Margin                     |
| --------------------- | ------------------------------ | ----------------------------------- |
| Collateral            | Full perpetual account balance | Fixed amount per position           |
| Liquidation scope     | All positions share risk       | Each position risks only its margin |
| Max loss per position | Up to full account balance     | Only the isolated margin            |

{% hint style="info" %}
Yellow\.pro currently uses **cross margin** as the primary mode. Isolated margin may be introduced in future updates.
{% endhint %}

## Leverage

**Leverage** is a multiplier that lets you open a position larger than your account balance: `Position Size = Margin × Leverage`. With 100 USDT and 10x leverage you control a 1,000 USDT position.

Leverage amplifies both gains **and** losses against the full position size:

| Leverage | Margin   | Position Size | 5% gain   | 5% loss   |
| -------- | -------- | ------------- | --------- | --------- |
| 1x       | 100 USDT | 100 USDT      | +5 USDT   | −5 USDT   |
| 10x      | 100 USDT | 1,000 USDT    | +50 USDT  | −50 USDT  |
| 20x      | 100 USDT | 2,000 USDT    | +100 USDT | −100 USDT |

Higher leverage moves your **liquidation price closer** to entry and leaves less buffer for fluctuations. Beginners should start low (1x–5x).

## Initial vs Maintenance Margin

* **Initial Margin** — the minimum required to open a position: `Initial Margin = Position Size / Leverage`.
* **Maintenance Margin** — the minimum required to **keep** a position open. If your effective margin falls below it, liquidation is triggered. It's a fixed percentage of position size, lower than the initial margin.

## Margin Ratio

The **Margin Ratio** is a real-time indicator of how close you are to liquidation:

| Margin Ratio     | Meaning                                       |
| ---------------- | --------------------------------------------- |
| Low (e.g. <50%)  | Well-funded, low risk                         |
| High (e.g. >80%) | Risk increasing — consider reducing positions |
| 100%             | Liquidation triggered                         |

## Keeping Your Margin Ratio Safe

The main levers are adding margin, reducing position size, lowering leverage, and using stop-loss orders. You'll also receive an email warning as your margin ratio approaches critical levels. For the full approach and how to enable alerts, see [Margin Warnings & Risk Management](/perpetual-trading/risk-and-liquidation/margin-warnings-and-risk-management.md); for how liquidation is triggered and priced, see [Liquidation & Mark Price](/perpetual-trading/risk-and-liquidation/liquidation-and-mark-price.md).

## Related Articles

* [Long, Short & Hedge Mode](/perpetual-trading/long-short-hedge-mode.md)
* [Risk & Liquidation](/perpetual-trading/risk-and-liquidation.md)
* [Cross-Margin Risk & ADL](/perpetual-trading/risk-and-liquidation/cross-margin-risk-and-adl.md)