> For the complete documentation index, see [llms.txt](https://sol-perps-bot.gitbook.io/sol-perps-bot-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://sol-perps-bot.gitbook.io/sol-perps-bot-docs/perpetual-futures-mechanics/margin-leverage-and-pnl.md).

# Margin, Leverage & PnL

This page details the mathematical formulas used by the Fluvion risk engine to evaluate position sizes, margin health, collateral requirements, and profit/loss calculations.

***

## 1. Notional Position Value

The notional value represents the total dollar value of an open position in USDC terms:

```
Notional Value = Position Quantity × Mark Price
```

**Example**: If you hold a long position of **50 SOL** and the Mark Price is **$150.00 USDC**, your notional position size is:

```
Notional = 50 × 150.00 = $7,500.00 USDC
```

***

## 2. Account Margin Ratio (AMR)

Your **Account Margin Ratio** is the primary metric defining account safety. It compares your total collateral against the aggregate notional size of all open positions:

```
Account Margin Ratio = Total Collateral Value / Total Notional Position Value
```

* **No Open Positions**: Defaults to a safe maximum of **1000%**.
* **Healthy Range**: Above the Initial Margin Ratio requirement.
* **Liquidation Trigger**: If **AMR ≤ MMR**, the account is flagged for liquidation.

***

## 3. Initial Margin Ratio (IMR)

The **Initial Margin Ratio** is the minimum margin ratio required to open a new position or withdraw funds.

Each market defines a **Base IMR**, which determines maximum entry leverage:

```
Max Leverage = 1 / Base IMR
```

*(e.g., a Base IMR of 1% permits up to 100x leverage; 2% permits up to 50x leverage).*

### Non-Linear Margin Scaling (IMR Factor)

To protect market integrity and mitigate liquidation impact from large positions, margin requirements increase non-linearly as position size grows:

```
IMR_i = max(1 / Max Leverage, Base IMR_i, IMR Factor_i × |Position Notional_i|^0.8)
Initial Margin_i = |Position Notional_i| × IMR_i
```

The overall required Initial Margin Ratio for the account is the volume-weighted sum:

```
Account IMR = Sum( (|Position Notional_i| / Total Notional) × IMR_i )
```

***

## 4. Maintenance Margin Ratio (MMR)

The **Maintenance Margin Ratio** is the absolute lower boundary of margin health. If your Account Margin Ratio drops below the MMR, liquidation is triggered immediately:

```
MMR_i = max(Base MMR_i, (Base MMR_i / Base IMR_i) × IMR Factor_i × |Position Notional_i|^0.8)
Maintenance Margin_i = |Position Notional_i| × MMR_i
```

The overall required Maintenance Margin Ratio for the account is:

```
Account MMR = Sum( (|Position Notional_i| / Total Notional) × MMR_i )
```

> \[!NOTE] Because MMR is strictly lower than IMR (e.g. 0.6% vs 1.0% for SOL), a safety buffer exists. You will first be restricted from opening new positions (when AMR drops below IMR) well before facing liquidation (when AMR drops below MMR).

***

## 5. Typical Market Margin Parameters

| Perp Market   | Base IMR (Max Lev) | Base MMR |  IMR Factor  |
| ------------- | :----------------: | :------: | :----------: |
| **SOL-PERP**  |     1.0% (100x)    |   0.6%   | 0.0000010667 |
| **BTC-PERP**  |     1.0% (100x)    |   0.6%   | 0.0000000910 |
| **ETH-PERP**  |     1.0% (100x)    |   0.6%   | 0.0000001724 |
| **BONK-PERP** |     5.0% (20x)     |   2.5%   | 0.0000071400 |
| **SUI-PERP**  |     5.0% (20x)     |   2.5%   | 0.0000028100 |

> \[!TIP] For the complete table of margin parameters, leverage tiers, and IMR Factors across all **80+ supported crypto and RWA markets**, refer to the [Supported Markets & Specifications](/sol-perps-bot-docs/platform-and-economics/supported-markets.md) catalog.

***

## 6. Profit and Loss (PnL) Calculations

### Unrealized PnL (uPnL)

Unrealized PnL is computed dynamically against the real-time **Mark Price**:

* **For Long Positions**:

  ```
  uPnL = Position Quantity × (Mark Price - Entry Price)
  ```
* **For Short Positions**:

  ```
  uPnL = Position Quantity × (Entry Price - Mark Price)
  ```

### Return on Equity (ROI %)

```
ROI % = (uPnL / Position Initial Margin) × 100
```

### Realized PnL (rPnL)

When a position is closed or partially reduced, the profit or loss is realized into settled USDC:

```
Realized PnL = Closed Quantity × (Exit Price - Entry Price) × Side Multiplier - Trading Fees ± Funding Payments
```

*(where Side Multiplier = +1 for Long, and -1 for Short).*

***

## 7. Account Balances Overview

```
Total Equity = USDC Balance + Sum(uPnL)
Free Collateral = Total Equity - Sum(Initial Margin of Positions + Open Orders)
Withdrawable Balance = Total Balance - Sum(Initial Margin) - max(0, uPnL)
```