Arcus liquidations: margin, mark price and what happens after

An Arcus liquidation happens when your margin no longer covers a losing position. Triggers run off the mark price rather than the last traded price. Cross margin shares one collateral pool across positions, isolated margin ring-fences each one, and an insurance fund absorbs shortfalls before auto-deleveraging and socialised losses step in.

Everything on this page applies to perps only. Spot Stock Tokens settle wallet to wallet with no leverage, so there is nothing to liquidate. Perps on Arcus run up to 50x leverage depending on the market, and perps access is gated by an invite code minted at one per $1M of qualifying volume. Arcus is also unavailable in the United States, the United Kingdom and Canada plus other restricted jurisdictions in its Terms.

How margin works on Arcus

Collateral and quote currency is USDG, the Paxos Labs stablecoin. Stock Tokens can also be posted as perps collateral, which is convenient and adds a layer of risk: your collateral and your position can fall together if both track equities.

That collateral sits in Robinhood Chain contracts rather than with Arcus. The platform is self-custodial, and Arcus says it never holds your funds or keys, with collateral moving only under user-authorised conditions. Self-custody does not exempt you from liquidation. Agreeing to the margin rules when you open a position is the authorisation.

Arcus does not publish its maintenance margin percentages or an initial margin table by market, so there is no public formula to plug numbers into. What it does publish is the leverage ceiling, up to 50x varying by market. The perps guide covers markets and leverage, and the perp fee calculator estimates a liquidation level from your own position size and entry.

Cross margin and isolated margin

Arcus supports both. Isolated positions shipped on 9 September 2026, so this is a relatively recent addition.

Cross margin pools your whole collateral balance behind every open position. A position moving against you draws on the full account, which means a trade survives a deeper drawdown before it closes. The trade-off is that one bad position can consume collateral supporting the others, and a cascade liquidates several positions rather than one.

Isolated margin assigns collateral to a single position. Lose it and the position closes, while everything else is untouched. The position liquidates sooner, because the buffer is smaller, and that is the point: you are buying a known maximum loss.

For most people the sensible default is isolated margin on anything speculative and cross margin only when you are genuinely running a hedged book and understand the netting. Choosing cross because it postpones liquidation is choosing a larger loss later.

Mark price, and why it matters

Margin health is measured against the mark price, the reference price a perps venue maintains, rather than the last trade on the order book. Arcus documents stop-loss and take-profit orders as triggering on mark price, which tells you the mark is the number the engine watches.

This protects you from one failure mode and exposes you to another. It protects you from a single thin-liquidity wick closing your position when the broader market never moved. It exposes you to the mark moving against you while the order book looks calm, which can feel arbitrary if you are watching prints instead of the mark.

Two Arcus-specific wrinkles make the mark worth watching closely. Stock Token and RWA markets trade 24/7 while the underlying US market does not, so overnight and weekend pricing carries more uncertainty and spreads widen. And Arcus commodity perps are based on ETFs such as GLD, SLV and USO rather than futures, so the reference is an equity product with its own hours and behaviour. The order types guide covers what you can actually place against that mark.

The insurance fund

Arcus runs an insurance fund, described as a protocol-managed reserve that pays out counterparties for liquidations that would otherwise be unprofitable. In plain terms: when a position is closed too late to cover its own losses, the fund covers the deficit so the trader on the other side still gets paid.

Its size is not published. Neither is a drawdown history or a top-up policy. That is a genuine gap, because the insurance fund is the thing standing between a disorderly liquidation and the two mechanisms below, and you cannot assess a buffer whose balance is secret. The security page lists the other places where Arcus documents a policy without publishing the numbers, including proof of reserves, which is described only as intended to be publicly attestable.

Auto-deleveraging and socialised losses

Arcus documents both. These are what happens when the insurance fund is not enough.

Auto-deleveraging, usually shortened to ADL, closes positions on the winning side of the trade to balance the book. Venues typically start with the most profitable and most leveraged accounts, because those are the positions whose closure does the most to restore balance. The uncomfortable implication is that being right can get you closed out at the venue’s timing rather than yours. High leverage increases your ADL priority as well as your liquidation risk.

Socialised losses spread a remaining deficit across traders rather than leaving it unpaid. If Arcus documents such a policy, and it does, then the worst case for a perps trader is not strictly capped at their own margin. This is rare, and it happens in exactly the conditions where everything else is also going wrong.

How to reduce the risk

None of this is avoidable while holding leveraged positions. It is reducible.

Use less leverage than the maximum. 50x means a 2% adverse move wipes the margin before fees, and fees scale with notional rather than with your capital, as the fee guide sets out.

Prefer isolated margin for directional trades, so a single idea cannot take the account.

Place a stop-loss when you open, not after the position is already losing. Arcus supports stop-market, stop-limit, take-profit and reduce-only orders at launch. Reduce-only is the one most people underuse: it guarantees an order can only shrink a position, which prevents a fat-fingered flip.

Keep spare collateral and keep spare ETH. Gas on Robinhood Chain is paid in ETH, and a margin top-up needs a transaction. An account with collateral but no ETH cannot act in the moment it most needs to.

Size positions against the weekend. A market that trades 24/7 against an underlying that does not is a market where gaps happen while you are asleep.

Watch what you post as collateral. Stock Tokens as perps collateral correlates your buffer with your position.

Risk, stated plainly

Leveraged positions on Arcus can be liquidated, and liquidation means losing the margin behind the position. Auto-deleveraging can close a profitable position without your input, and socialised losses mean an extreme event can reach traders who were not liquidated. Most leveraged traders lose money.

Stock Tokens are not shares: no voting rights, no dividend claim as such, no guaranteed redemption for real stock, and the price can diverge from the underlying, as the Stock Tokens guide explains. Terms like mark price, funding rate and ADL are defined in the glossary. Nothing on this page is financial advice.