Leverage, liquidation and knock-outs
Leverage is one slider on the ticket, from 1x to the market's maximum, saved per market. You can also type an exact value. Below the market's standard max (5x on ETH² at launch) a position is a margin trade with liquidation; above it the same position opens as a knock-out.
| Up to the standard max (5x) | Above it, to the market max (50x) | |
|---|---|---|
| What closes you | Liquidation at maintenance margin | A fixed knock-out price set at open |
| Worst case | Equity at maintenance minus a 1% liquidation fee | You lose your collateral, never more |
| Trading fee | 0.05% each way | 0.02% each way, plus 5% of the profit on a winning close |
| Partial closes | Liquidation comes in parts first | The whole position closes at the knock-out |
| Add margin | Yes | No: collateral is fixed |
The market's maximum leverage grows with the pool: 5x / 50x at launch, 10x / 75x once the pool reaches $250k, 20x / 100x at $1M. Cubes get 2/3 of those limits (same distance to liquidation as a square) and HYPE markets half.
Margin and liquidation (standard positions)
Positions use isolated margin: each one has its own collateral and its own liquidation price. Your other positions and free cash are never pulled in, so the most a position can lose is the collateral behind it. "+ Margin" on a position moves cash from your account into it to push the liquidation price away.
Initial margin is 1 ÷ leverage. Maintenance margin is half the initial margin at the market's max leverage, fixed when you open: at a 5x max it is 10% of your position size. If your equity (collateral plus unrealized P&L) falls to maintenance, the engine liquidates in parts first: it closes enough to bring equity back to twice maintenance, so a wick doesn't take the whole position. A 1% liquidation fee applies to what's closed, half to the insurance fund and half to the protocol.
Because the payoff is convex, leverage on a power perp is stronger than it looks: 3x on ETH² behaves like roughly 6x on ETH for small moves. The ticket and the Payoff view show the liquidation price and the move to it, so check them before opening.
Knock-outs (above the standard max)
A knock-out position has no maintenance margin and no partial liquidation. At open the engine fixes a knock-out price: the index at which your equity would fall to 20% of your collateral. If the index touches it, the position closes there; the remaining 20% goes to the insurance fund, which is what buys the certainty that a gap past the knock-out never costs you more than you put in. You know your exit before you enter, which is the point of trading at 10x–50x on a convex payoff.
Knock-outs pay a lower trading fee (0.02%) and give up 5% of their profit on a winning close.
Setting your leverage
The ticket's slider runs from 1x to your max leverage for that market: green up to the standard max, amber past it where positions become knock-outs. Your max starts at the market's maximum. Click max 50x ✎ next to the slider to lower it (say to 10x); the slider then stops there, so you can't reach 50x by accident. Both your leverage and your max are saved per market in your browser.
Reading the ticket
- Liquidation price or Knock-out price: where the position closes.
- Max move to liquidation: the same thing as a percent move in the coin.
- Fee: the open fee in dollars.
- Funding: per day at the current rate.
- Payoff (chart button): your return on collateral at every coin price, with the liquidation or knock-out marked and the curve greyed beyond it.