Maintenance Margin is the minimum margin required to continue holding a position.
For perpetual contracts, the maintenance margin base rate is 0.5% for BTC and 1% for ETH, EOS and XRP of the contract value when opening a position. It will increase or decrease accordingly as risk limit changes.
Liquidation occurs when the isolated margin for the position is less than its maintenance margin level.
A trader buys 12,000 BTCUSD contracts at 8,000 USD with 50x leverage.
The isolated margin used for this position is:
Initial margin = 12,000/(8,000*50)
= 0.03 BTC
= 0.0075 BTC
This means that this position could take an unrealized loss of up to 0.0225 BTC (0.03 BTC - 0.0075 BTC) before the occurrence of liquidation. It is thus very important for traders to be constantly aware of the margin level on their positions.