20x leverage, with the arithmetic attached

Polymarket Perps leverage runs to 20x on the biggest markets and 10x on the rest. Every setting resolves to one number that matters more than the multiplier does — the adverse move that ends the position — and that number is computable before you click anything.

The full Perps manual is here if you want the rest of the product first.

The two numbers that govern a position

A leveraged position is governed by two quantities and nothing else. Initial margin is what you must post to open it. Maintenance margin is the level your equity may not fall below.source↗

IM = Notional / Leverage
MM = Notional × MMR      where MMR = 0.5 / MaxLeverage

Your leverage setting appears in the first formula. It does not appear in the second. Between them sits the room you actually have: equity starts at IM, liquidation begins when equity drops under MM, and the distance between the two is measured in price, not in confidence.source↗

What each leverage setting buys you

Every sensible setting on a 20x market and on a 10x market, with the exact adverse move that reaches liquidation for a position opened at precisely its initial margin and carrying no unsettled fees or funding. Watch the third column.

Two things fall out. Shorts get slightly less room than longs at the same setting — 2.44% against 2.56% at 20x — because a short’s notional grows as price rises, so the maintenance requirement grows with the loss. And 1x is not symmetric either: a 1x long is only liquidated if price reaches zero, but a 1x short still has a real liquidation price at +95.12%, because there is no ceiling on what the thing you sold can be worth.

Why lowering leverage does not lower the floor

The maintenance margin rate on a Polymarket market is MM = Notional × MMR, where MMR = 0.5 / MaxLeverage. The MaxLeverage in that expression is the market’s published cap, not the number you picked in the ticket. A 20x market charges 2.5% of notional as maintenance margin to every position on it, forever, whether the trader opened at 20x or at 2x.source↗

You are not lowering the floor. You are standing further above it.

This is also why the same leverage setting is a different trade on a different market. 10x on a 20x market leaves 7.69% of room; 10x on a 10x market leaves 5.26%, because that market’s floor is twice as high. Every market’s cap and floor is listed here.source↗

Why 20x is 2.56%, not 2.5%

The intuitive answer is that you post 5%, you get liquidated at 2.5%, so you can lose 2.5% of notional — a 2.5% move. That answer is wrong, and it is wrong in the generous direction. The real number is 2.56%.

One word in the formula does it: maintenance margin is charged on notional at the mark, not notional at entry. As a long loses, its notional shrinks — but the maintenance requirement shrinks with it, so the two chase each other down and meet slightly later than the naive subtraction suggests.source↗

equity(P) = B + S·(P − E)          MM(P) = S·P·mmr

B + S·(P − E) = S·P·mmr
P = (S·E − B) / (S·(1 − mmr))

with B = IM = S·E/L:
P/E = (1 − 1/L) / (1 − mmr)
    = (1 − 1/20) / (1 − 0.025)
    = 0.974359   →   a 2.564% adverse move

The short case flips the signs and lands the other way — (1 + 1/L) / (1 + mmr), which is 2.44% — because a losing short’s notional grows. A calculator that fixes maintenance margin at entry reports 2.5% for both sides. Bookie’s calculator runs it on your actual position.

How fast leverage eats your margin

Return on margin is just the price move multiplied by leverage. That is the whole appeal and the whole problem in one identity.

A 1% move is a rounding error on a chart and 20% of everything you posted at 20x. Bitcoin does 1% while you are making coffee.

The bottom row is the liquidation distance from the first table. At 20x that move has eaten 51.3% of your margin — not all of it. You never get to spend the last 2.5% of notional, because that is the maintenance floor, and the position is closed the moment your equity touches it. Leverage does not run out of money before it runs out of permission.

How risk tiers cap position size

The market cap is only the first constraint. Each instrument carries a ladder of risk tiers that lowers the maximum leverage as position notional grows, and the cap for your tier applies to your entire notional, not bracket by bracket.source↗ An order that would push you across a threshold without first lowering your leverage setting is rejected with invalid_leverage.

Walk that ladder with money in it. Hold $200,000 of SP500-USD at 20x and you have posted $10,000. Add $50,000 of exposure so the position reaches $250,000 and the cap for the whole thing becomes 10x, so the minimum margin behind it becomes $25,000. $50,000 more exposure, $15,000 more margin — the increase is not proportional to what you added, because the new cap is retroactive across everything you already had.

Which is a sizing constraint disguised as a leverage constraint. If you intend to scale a position, the leverage you can hold at the end is the leverage you should plan the whole thing around, not the one available while it is small.

How far price must move to break even

Before a position can make anything it has to cover a round trip of fees and however much funding it accrued while open. At the bottom fee tier that is 0.0400% in and 0.0400% out on notional, plus +0.0013% an hour for a long on a crypto market at the resting funding rate — the rate a perfectly fair market still charges, because the funding formula keeps a fixed interest leg.source↗source↗

A day-long 20x long on crypto needs 0.110% of favourable movement to get back to flat. That is 2.2% of the margin you posted, and it consumes 4.3% of the distance to your liquidation price before the trade has expressed a single opinion. Hold for a week and the funding leg does most of the work.

• ▸The breakeven move is a fraction of price, so it does not change with leverage. What changes with leverage is how much of your capital that same move represents.
• ▸It scales with notional, not with margin — which means the fee drag on a 20x position is twenty times heavier per dollar of collateral than on a 1x one.
• ▸Getting liquidated adds a further 0.5% of notional on every fill made while flagged, on top of the ordinary taker rate.source↗

None of that is an argument against leverage. It is an argument for knowing the size of the move you are predicting before you choose a setting. The fee page has a calculator for the first leg, and isolated versus cross decides what a liquidation takes with it.