Margin Mode
Synthetix use a cross-margin account model by default. All collateral in the trader’s account supports all open positions, and unrealized PnL from any position contributes to (or detracts from) available margin for the entire account.
Cross Margin
All collateral and all open positions share the same account equity.
Unrealized PnL is applied at the account level and can strengthen or weaken the entire portfolio.
Liquidations are evaluated based on account-level maintenance margin, not individual positions.
New positions draw initial margin from the same shared collateral pool.
Initial Margin and Leverage
When opening a position, the system calculates the initial margin requirement (IMR) based on the notional value of the trade and the selected leverage for that market.
Initial Margin Formula
initial_margin_required = position_size * mark_price / max_leverage
IMR is the minimum margin needed to open a position.
Markets have different maximum leverage, which determines how much IMR is needed.
Adjusting Leverage
Leverage is not locked after entry and can vary based on:
Increase leverage indirectly if price moves against the position (equity decreases).
Reduce leverage by adding collateral or reducing position size.
Increase/decrease IMR usage by changing a markets leverage
Adding or Removing Margin
Cross-margin accounts allow free collateral deposits at any time.
Withdrawing margin a portion is only permitted if the account still satisfies:
Initial margin requirement
Maintenance margin requirement
Unrealized PnL and Margin Availability
In Synthetix, unrealized PnL updates continuously and affects the trader’s account equity, which in turn determines margin availability.
Cross Margin
Unrealized PnL is shared across the entire account.
Profitable positions increase total equity and support new positions.
Losing positions reduce equity and can push the account toward liquidation.
Maintenance Margin and Liquidations
Maintenance margin (MM) defines the minimum margin required to keep the account solvent as prices move.
Maintenance margin is calculated as:
maintenance_margin = position_notional * maintenance_margin_ratio
Each market has its own MMR (%) based on its risk profile.
Liquidation Condition
A cross-margin account becomes eligible for liquidation when:
account_equity < total_maintenance_margin
At this point:
The account enters the liquidation flow.
Depending on configuration, the system may attempt partial liquidation or full closure.