> ## Documentation Index
> Fetch the complete documentation index at: https://docs.tradealpha.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Margin, Leverage & Liquidation

> Understand how margin, leverage, and liquidation work on Alpha — and how to avoid getting liquidated.

Leverage is the engine that makes perp trading powerful — and risky. This page covers the three things you must understand before opening a leveraged position: **margin**, **leverage**, and **liquidation**.

## What is leverage?

Leverage lets you control a **larger position with a smaller amount of money**. With 100x leverage, \$100 of margin controls \$10,000 of position size.

<Warning>
  Leverage multiplies both gains **and** losses. A 1% adverse move on a 100x position wipes out your entire margin.
</Warning>

## What is margin?

Margin is the **collateral you put up to open a leveraged position**. If your trade goes against you, your margin is what's at risk.

## What's the maximum leverage on Alpha?

Up to **100x**. Maximum leverage may be lower on certain assets — check the asset's market page in the app.

## What is liquidation?

If a leveraged trade moves against you far enough, your margin can no longer support the position and the system **automatically closes it**. When you're liquidated, you lose your entire margin for that position.

## How is the liquidation price calculated?

Based on:

* Your **entry price**
* Your **leverage**
* Your **margin amount**
* **Funding payments** accrued

The current liquidation price is displayed for every open position.

## How do I avoid liquidation?

<CardGroup cols={2}>
  <Card title="Use lower leverage" icon="gauge">
    More breathing room before liquidation.
  </Card>

  <Card title="Add margin" icon="plus">
    Top up margin on a losing position to push your liquidation price further away.
  </Card>

  <Card title="Set a stop loss" icon="shield">
    Exit on your terms before the system liquidates you.
  </Card>

  <Card title="Size responsibly" icon="calculator">
    Don't risk more than you can afford to lose.
  </Card>
</CardGroup>

## What is auto-deleveraging (ADL)?

In extreme market conditions, if losing positions can't be liquidated normally, the system may close winning positions on the other side to balance the book.

## Is there an insurance fund?

Yes — an insurance fund covers losses from liquidations that occur faster than the system can close them. This protects winning traders from socialized losses.