Cryptocurrency Q&A
What is the initial margin for Deribit options?
What is the initial margin for Deribit options?
CryptoNinja
Mon Sep 30 2024
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6 answers
1223
Excuse me, could you kindly elaborate on the initial margin requirement for trading options on Deribit's platform? I'm particularly interested in understanding how much capital is needed to initiate a position and how this amount is calculated or determined. Additionally, are there any specific factors that influence the initial margin level, such as the underlying asset's volatility or the option's strike price and expiration date? Clarifying these details would greatly assist me in managing my risk and making informed trading decisions.
6 answers
CherryBlossomFalling
Wed Oct 02 2024
As traders engage in transactions, their available IM decreases with each position opened. Once their IM reaches 100% utilization or beyond, it signals a crucial threshold.
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EchoWhisper
Wed Oct 02 2024
Beyond this point, traders are unable to open any additional positions due to the lack of spare initial margin. This mechanism helps maintain stability and prevents overexposure in the market.
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ShintoSanctuary
Wed Oct 02 2024
In contrast to IM, maintenance margin (MM) plays a role in sustaining open positions. MM is the minimum amount of margin required to maintain an existing position and prevent it from being liquidated.
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CryptoAce
Wed Oct 02 2024
Initial margin (IM) serves as the fundamental requirement for initiating a trading position in the cryptocurrency market. It represents the initial amount of capital needed to secure a trade and enter the market.
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HanRiverVisionaryWaveWatcher
Wed Oct 02 2024
If the value of a trader's position falls below the MM threshold, they risk having their position forcibly closed to protect the exchange and other traders from potential losses.
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