# Risk and Liquidation

## Margin Modes

### Cross Margin

All positions share a single margin pool. Unrealized profit from one position can offset losses in another. Available for standard crypto perps (BTC, ETH, SOL, etc.).

### Isolated Margin

Each position has its own margin. Limits risk to the margin allocated to that specific position. Required for all HIP-3 assets (xyz:, flx:, vntl:, etc.).

## Leverage

Maximum leverage varies by asset:

| **Asset**  | **Max Leverage** | **Margin Mode**   |
| ---------- | ---------------- | ----------------- |
| BTC        | 40x              | Cross or Isolated |
| ETH        | 25x              | Cross or Isolated |
| SOL        | 20x              | Cross or Isolated |
| xyz:SILVER | 25x              | Isolated only     |
| xyz:GOLD   | 25x              | Isolated only     |

* Higher leverage = higher potential return but lower distance to liquidation
* Large positions may have tiered leverage limits (e.g., BTC positions above $150M notional are limited to 20x)

## Adjusting Leverage on Open Positions

| **Action**         | **Cross Margin**          | **Isolated Margin**                       |
| ------------------ | ------------------------- | ----------------------------------------- |
| Increase leverage  | Supported                 | Supported                                 |
| Decrease leverage  | Not supported             | Add margin to effectively reduce leverage |
| Switch margin mode | Must close position first | Must close position first                 |

You cannot hold the same asset in both cross and isolated mode simultaneously. Different assets can use different margin modes (e.g., BTC in cross, SOL in isolated).

## Liquidation

When your margin falls below the maintenance margin requirement, your position will be liquidated.

Maintenance margin rate = (1 / max leverage) / 2

| **Max Leverage** | **Maintenance Margin** |
| ---------------- | ---------------------- |
| 40x              | 1.25%                  |
| 25x              | 2.00%                  |
| 20x              | 2.50%                  |
| 10x              | 5.00%                  |
| 3x               | 16.67%                 |

Liquidation price is shown on every open position in the Positions panel.

<details>

<summary><strong>Partial liquidation</strong></summary>

* For positions > $100K, only 20% is liquidated initially.
* You have a 30-second window to add margin before the rest is liquidated.

</details>

<details>

<summary><strong>Full liquidation</strong></summary>

* If margin is still insufficient after partial liquidation, the entire position is closed.

</details>

<details>

<summary><strong>Backstop liquidation</strong></summary>

* If account equity falls below 2/3 of maintenance margin and the order book cannot absorb the liquidation, remaining margin is not returned.

</details>

## Risk Management Tips

{% hint style="info" %}

* Always set a Stop Loss, especially with leverage above 5x
* Start with low leverage: 2-5x while learning the platform
* Monitor funding rates:  Hyperliquid's funding rate cap (4%/hour) is much higher than CEXs. Holding positions through extreme funding can cause significant losses
* Don't use your full balance. Leep a margin buffer for volatility
* Use Isolated Margin for high-risk trades. This limits maximum loss to the margin you allocate
* Be cautious with RWA assets on weekends. Markets (stocks, indices) may have reduced liquidity when traditional markets are closed, increasing manipulation risk
  {% endhint %}


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