> ## Documentation Index
> Fetch the complete documentation index at: https://docs.ondoperps.xyz/llms.txt
> Use this file to discover all available pages before exploring further.

# Collateral Value

A haircut is the discount applied to your collateral's market value when calculating your credited margin.

**Example:** A 10% haircut on a \$1,000 SPY-equivalent balance means the exchange credits you with \$900 of margin. The full underlying tokenized stock remains yours and available for withdrawal; the haircut affects only how much of the displayed value counts toward margin, absorbing price volatility and the cost of converting collateral to USDC if Auto-Exchange or liquidation is ever triggered.

**Key details:**

* Collateral ratio equals 1 minus the haircut (10% haircut = 0.90 collateral ratio).

| Term                        | Formula                                 |
| :-------------------------- | :-------------------------------------- |
| Credited Margin (per asset) | `quantity x mark price x (1 - haircut)` |
| Collateral Ratio            | `1 - haircut`                           |

For details on accepted collateral see [Funding Ondo Perps](/funding-ondo-perps).

## **How Margin Is Calculated**

Your account health is represented by a single number called **margin balance**:

```text theme={null}
margin balance = USDC balance + Non-USDC Margin Value + unrealized PnL + funding
```

Where:

* **Non-USDC Margin Value:** Total post-haircut value of all your deposited tokenized equities, `sum(quantity x price x (1 - haircut))` for each asset, counting tokens up to the asset's collateral cap (see [Funding Ondo Perps](/funding-ondo-perps)).
* **USDC balance:** Your cash balance, which can be negative if you have accumulated losses or fees.
* **Unrealized PnL:** Profit or loss on your open positions.
* **Funding:** Accumulated funding payments.

Your margin balance captures everything that affects your account health in one number. It moves when asset prices change, when your positions gain or lose value, when you pay fees, and when funding payments accrue.