Data as of October 1, 2026. Perpetual contracts are complex instruments and may be liquidated rapidly. Funding rates and mark prices change without notice. Leverage magnifies gains and losses. Fees, network costs, and slippage reduce returns. Past performance is not indicative of future results.
It works much like buying stocks on margin through a traditional brokerage — it increases your buying power, but it also increases both potential gains and potential losses, and introduces borrowing costs and liquidation risk.
What is spot margin?
Normally, you can only buy assets using the funds already in your account — $100 buys about $100 worth of an asset. When spot margin is enabled, you can use eligible assets as collateral and borrow additional funds to place a larger trade.
For example, with $100 and 3× buying power, you may be able to purchase up to $300 worth of an asset: $100 from your own balance and $200 borrowed. On Nado, borrowed funds come from liquidity deposited by other users, and borrowers pay a variable interest rate in return. Spot margin is not free money — it’s a loan supported by the assets in your account.
Why do traders use spot margin?
The main benefit is more buying power without depositing more funds. But the effect works in both directions:
Scenario | Position | If price rises 10% | If price falls 10% |
|---|---|---|---|
Without margin | $100 | +$10 | −$10 |
With 3× margin | $300 | +$30 | −$30 |
Spot margin can increase potential gains, but it can also increase potential losses much faster.
What does borrowing cost?
The borrowed amount is not free. You pay a variable interest rate for as long as the borrowing remains open. The rate can change with market conditions, so check the current borrowing rate before placing a trade.
What is the biggest risk of spot margin?
The biggest risk is liquidation. Because you’re borrowing funds, the assets in your account support the loan. If your account value falls too far to safely cover the borrowed amount, Nado may automatically reduce or close your positions.
Nado shows two key risk indicators:
Maintenance Margin Usage — how close your account is to liquidation. The lower the percentage, the more safety buffer you have. If it reaches 100%, positions may be automatically closed.
Account Leverage — how large your total position is compared with your account value. Higher account leverage means your profit and loss react more strongly to price movements.
Liquidation is more likely when you use more buying power, open a larger position, or when the market moves sharply against you. You may reduce risk by lowering your position size, repaying part of the borrowed amount, or adding funds — though adding funds also exposes more of your balance if the market keeps moving against you.
Key takeaways
Spot margin lets you borrow against your assets to place a larger trade.
It increases both potential gains and potential losses.
Borrowed funds accrue variable interest for as long as the position is open.
Watch Maintenance Margin Usage and Account Leverage to manage liquidation risk.