How to avoid liquidation on Hyperliquid

The short answer

Set less leverage than the market allows, keep margin that no position needs, and know your liquidation price before you open: a cross position is liquidated when the account value, unrealized result included, falls under the maintenance margin times the open notional. Then act before the mark price gets there, because once a position goes to backstop liquidation the maintenance margin is not returned to you.

No arrangement removes the risk. Perpetuals are leveraged: a position's whole margin can be lost, and in a cross account every cross position shares that fate.

Leverage, and the margin left

The margin needed to open is the position size times the mark price divided by the leverage, and the maintenance margin is half the initial margin at the asset's maximum leverage. Maximum leverage runs from 3 to 40 times depending on the asset, so the maintenance margin is between 16.7% of the notional on a 3x asset and 1.25% on a 40x one.

For a cross position, the liquidation price does not depend on the leverage you set: a lower leverage simply uses more collateral, and what moves the price is the account value left over. For an isolated position it does depend on the leverage, because the margin put aside is the initial margin that leverage asks for.

Leverage is checked only when the position opens. After that it is yours to watch, and the documentation names three ways to act on a position in the red: close part or all of it, add margin if it is isolated, or deposit USDC if it is cross.

Isolated or cross

Cross margin shares one pool of collateral between every cross position. It uses capital best and ties the positions together: when a cross position is backstop liquidated, all your cross positions and all your cross margin go to the liquidator, and with no isolated position the account ends at zero.

Isolated margin confines an asset's collateral to that asset: a liquidation there touches neither your other isolated positions nor your cross ones, and the loss is bounded by the margin put aside. Some assets are strict isolated, the same thing except that margin cannot be taken back out, only released as the position closes. Isolated margin bounds the damage; it does not make the position safer.

A stop, or room

Hyperliquid's documentation is explicit about the incentive: to avoid losing the maintenance margin, place stop loss orders or exit before the mark price reaches the liquidation price. A stop costs the loss it takes and ends the position; room costs nothing until the market goes there, and ends nothing.

What you watch matters as much. Liquidations use the mark price, which combines outside exchange prices with Hyperliquid's own book state, not the last trade printed on the book, and the two can sit far apart on a volatile day.

• A liquidation is first sent to the book. If enough closes for the requirement to be met again, the rest of the collateral stays yours.
• Under two thirds of the maintenance margin, the position is taken over by the liquidator vault, and the maintenance margin is not given back.
• Above 100,000 USDC, only 20% of a liquidatable position goes to the book at a time, with a 30 second cooldown after which the whole position goes out.

The agent's way, and its price

The daily pilot places no stop loss on the order book, ever. It builds the position in steps: a ladder of 1, 1, 2, 3 and 5 stakes, each posted in advance 0.5 daily ATR further against the position, every step at three times leverage, and the whole thing leaves on one limit at the average plus 10% of the base stake.

The size is computed so that, with every step filled, the price can still move 100% against the position before any liquidation. That room is what replaces the stop: with the defaults the base stake works out at 2.78% of the equity, and the complete ladder engages the equity once over. Those figures were measured on two years of four-hour candles with the venue's own funding.