# Leverage & Margin

***

### Overview

Leverage lets you trade larger positions with less capital. Margin is the collateral you put up to back those positions. Together, they determine your position size, liquidation price, and overall risk.

On Hyperliquid, you can use up to 50x leverage and choose between cross margin (shared collateral) or isolated margin (per-position collateral).

**What you can do:**

* Set leverage for any asset from 1x to 50x
* Switch between cross and isolated margin mode per asset
* View your current leverage and margin settings
* Understand how leverage affects liquidation and risk

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### Setting Leverage

You can set or change leverage for any asset at any time. This applies to new orders on that asset going forward.

| Prompt                            | Interpretation                                           |
| --------------------------------- | -------------------------------------------------------- |
| "Set BTC leverage to 10x"         | 10x leverage on all new BTC orders                       |
| "Change ETH leverage to 5x"       | Updates ETH to 5x                                        |
| "Set SOL to 20x leverage"         | 20x on SOL                                               |
| "Max leverage on BTC"             | Sets to maximum available (up to 50x depending on asset) |
| "Lower my ETH leverage to 2x"     | Reduces ETH leverage to 2x                               |
| "What's my current BTC leverage?" | Shows current leverage setting for BTC                   |

{% hint style="info" %}
**Note**: Changing leverage on an asset with an open position will adjust your margin requirements. If you increase leverage, margin is freed up. If you decrease it, more margin is required.
{% endhint %}

***

### How Leverage Works

Leverage multiplies your exposure. The trade-off is always the same: more exposure per dollar, but closer to liquidation.

| Leverage | Margin for $10,000 Position | Approx. Liquidation Distance |
| -------- | --------------------------- | ---------------------------- |
| 1x       | $10,000                     | \~100% move against you      |
| 2x       | $5,000                      | \~50% move                   |
| 5x       | $2,000                      | \~20% move                   |
| 10x      | $1,000                      | \~10% move                   |
| 20x      | $500                        | \~5% move                    |
| 50x      | $200                        | \~2% move                    |

**Example**: You want a $5,000 long on ETH.

| Leverage | Margin Used | ETH Drops 5%               | ETH Drops 10%              |
| -------- | ----------- | -------------------------- | -------------------------- |
| 1x       | $5,000      | -$250 (-5%)                | -$500 (-10%)               |
| 5x       | $1,000      | -$250 (-25%)               | -$500 (-50%)               |
| 10x      | $500        | -$250 (-50%)               | -$500 (-100% = liquidated) |
| 20x      | $250        | -$250 (-100% = liquidated) | liquidated                 |

The dollar loss is the same regardless of leverage. What changes is the **percentage loss on your margin**, which is what determines liquidation.

***

### Margin Modes

Hyperliquid supports two margin modes. You can set each asset to a different mode.

#### Cross Margin (Default)

All positions share your entire account balance as collateral. If one position is losing, your other positions and free balance help absorb the loss.

**Pros:**

* Lower liquidation risk since your whole balance backs every position
* Winning positions offset losing ones
* More capital-efficient for multiple positions

**Cons:**

* A single catastrophic loss can affect your entire account
* Harder to isolate risk on speculative trades

| Prompt                           | Interpretation                              |
| -------------------------------- | ------------------------------------------- |
| "Set BTC to cross margin"        | BTC positions share account-wide collateral |
| "Use cross margin on ETH at 10x" | Cross margin with 10x leverage              |
| "Switch SOL back to cross"       | Changes SOL from isolated to cross          |

#### Isolated Margin

Each position gets its own separate collateral. If the position is liquidated, only the assigned margin is lost. The rest of your account is untouched.

**Pros:**

* Maximum loss is limited to the margin assigned to that position
* Great for high-risk or speculative trades
* Protects your other positions and balance

**Cons:**

* Each position only has its assigned margin as a buffer
* Closer to liquidation compared to cross margin
* Can't benefit from gains on other positions

| Prompt                               | Interpretation                       |
| ------------------------------------ | ------------------------------------ |
| "Set ETH to isolated margin"         | ETH position gets its own collateral |
| "Isolate my SOL position at 5x"      | Isolated margin with 5x leverage     |
| "Use isolated margin on DOGE at 10x" | High-risk trade with capped downside |

#### Cross vs Isolated Comparison

| Feature            | Cross Margin                     | Isolated Margin                 |
| ------------------ | -------------------------------- | ------------------------------- |
| Collateral         | Shared across all positions      | Separate per position           |
| Liquidation risk   | Lower (whole balance as buffer)  | Higher (only assigned margin)   |
| Max loss           | Entire account (worst case)      | Only the assigned margin        |
| Best for           | Most trading, multiple positions | Speculative or high-risk trades |
| Capital efficiency | Higher                           | Lower                           |

***

### Viewing Margin Status

Check your current margin usage, free balance, and leverage settings at any time.

| Prompt                              | Interpretation                                |
| ----------------------------------- | --------------------------------------------- |
| "Show my margin usage"              | Free margin, used margin, total equity        |
| "How much free margin do I have?"   | Available margin for new positions            |
| "What leverage am I using on BTC?"  | Current leverage setting for BTC              |
| "Am I close to liquidation on ETH?" | Shows ETH position with liquidation price     |
| "Show my account overview"          | Full account snapshot with all margin details |

#### Key Margin Terms

| Term                   | What It Means                                        |
| ---------------------- | ---------------------------------------------------- |
| **Equity**             | Total account value (balance + unrealized PnL)       |
| **Used Margin**        | Collateral currently backing open positions          |
| **Free Margin**        | Equity minus used margin, available for new trades   |
| **Margin Ratio**       | Used margin / equity. Higher = closer to liquidation |
| **Liquidation Price**  | The price at which your position gets force-closed   |
| **Maintenance Margin** | Minimum margin required to keep a position open      |

***

### Liquidation

Liquidation happens when your losses eat through your margin to the maintenance margin level. Hyperliquid will force-close your position to prevent negative balance.

#### How to Avoid Liquidation

1. **Use lower leverage** - Gives your position more room to breathe
2. **Set stop-losses** - Exit before liquidation price is reached
3. **Monitor margin ratio** - If it's climbing, consider reducing position size
4. **Add margin** - Deposit more funds to increase your buffer
5. **Use isolated margin for risky trades** - Caps your loss to the assigned margin

***

### Common Setups

#### Conservative (Beginners)

```
Leverage: 2-3x
Margin: Cross
Stop-loss: Always, 3-5% from entry
Position size: 5-10% of account per trade
```

#### Moderate (Experienced)

```
Leverage: 5-10x
Margin: Cross for core positions, isolated for speculative plays
Stop-loss: Always, 1-3% from entry
Position size: 2-5% of account per trade
```

#### Aggressive (Advanced)

```
Leverage: 10-20x
Margin: Isolated (to cap risk per trade)
Stop-loss: Tight, 0.5-1% from entry
Position size: 1-2% of account per trade
```

{% hint style="warning" %}
**Tip:** Regardless of experience level, always try to use SLs. Higher leverage demands tighter stops.
{% endhint %}

***

### Pro Tips

1. **Start with low leverage** - 2-5x gives you room to learn without getting liquidated on small moves
2. **Use isolated margin for degen plays** - If you want to ape into a volatile altcoin, isolate it so a liquidation doesn't touch your other positions
3. **Cross margin is better for hedging** - If you're long BTC and short ETH, cross margin lets them offset
4. **Watch your free margin** - If it drops near zero, you're one bad wick from liquidation
5. **Reduce leverage, don't just add margin** - Lowering leverage is often better than throwing more money at a losing position
6. **Higher leverage = tighter stops required** - At 20x, a 5% move wipes your margin. Plan accordingly

***