Margin Ratio

The Margin Ratio is a quantitative metric representing the health of a leveraged account, calculated as the ratio of account equity to the total position value. It provides a real-time indicator of how close an account is to its maintenance margin threshold.

A higher margin ratio indicates a safer, less leveraged position, while a lower ratio signals increased risk of liquidation. Protocols continuously monitor this ratio to trigger liquidation logic automatically.

It is a core component of automated risk management systems in decentralized finance and crypto derivatives.