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# Margin System

## Margin Modes

Paradex offers the following margin modes to accommodate different trading strategies:

#### [Cross Margin](/risk/cross-margin-requirement)

Margin shared across all positions.

#### Isolated Margin

Margin based on individual positions.

#### [Portfolio Margin](/risk/portfolio-margin)

Portfolio-level risk evaluation for reduced margin. Currently in beta.

## Instrument Types

All instruments are quoted and valued in USD.

Paradex currently supports only USDC as a collateral asset. You have to deposit USDC on your wallet to trade and all PnL accrued or charged to your wallet will be in USDC.

## Margin Checks

Paradex performs two critical margin checks to ensure platform stability and protect against market manipulation:

#### Initial Margin Check

Validates that an account can take additional risk. Examples of when this check is performed:

* Submitting new orders
* Requesting withdrawals that would increase account leverage

#### Maintenance Margin Check

Determines if an account is approaching bankruptcy.

> **If an account fails this check**
>
> Account positions and balances will be liquidated

### How Margin Checks Work

All margin checks follow a simple comparison formula:

```
Account Value ≥ Margin Requirement
```

| Component              | Cross Margin                                                                                                                 | Isolated Margin                                                 | Portfolio Margin                                                                                                    |
| ---------------------- | ---------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- |
| **Account Value**      | Sum of • USD Collateral (USDC balance) • Unrealized PnL from all positions • Benefits from PnL offsetting across positions   | Position Value only                                             | Sum of • USD Collateral (USDC balance) • Unrealized PnL from all positions                                          |
| **Margin Requirement** | Based on • All open positions • Exchange-level parameters • [Cross Margin Requirement](cross-margin-requirement) methodology | Based on • Individual position only • Exchange-level parameters | Based on • Portfolio-level risk evaluation • SCAN risk scenarios • [Portfolio Margin](portfolio-margin) methodology |

For detailed calculations of Account Value and related risk metrics, see the [Margin Term Reference](margin-term-reference).