Standard Margin

Initial Margin

Initial margin is the minimum amount required for executing a position

  • Buy option call/put : Initial premium price($) + close fees

  • Sell put option : Max(a * spot price + mark price of the premium , a * Maintenance margin)

  • Sell call option :a * Spot price + Mark Price of the premium

Maintenance margin

Maintenance margin is the minimum amount required to be maintained in the portfolio to keep the position opened

  • Buy option call/put : Initial premium price($) + close fees

  • Sell put option : Max(b * spot, b * Mark Price of the premium) + Mark Price of the premium

  • Sell call option:b* Spot price + Mark Price of the premium

Where a and b are margin variables defined per asset :

Portfolio Maintenance Margin

In version 2, we will introduce a sophisticated margin model that off-sets hedged positions and by that lower the margin requirement to ensure solvency

Maintenance Margin Rate

An account becomes eligible for liquidation if its Maintenance Margin Rate Crosses 100%. The MMR is give by the equation below :