Portfolio margin mode enables traders to manage spot, margin, perpetual futures, expiry futures, and options positions within a single account. This advanced system employs a risk-based model to calculate margin requirements dynamically, optimizing capital efficiency while maintaining robust risk coverage.
Key Features of Portfolio Margin Mode
- Unified Position Management: Combines positions across all supported instruments for holistic risk assessment.
- Risk-Based Margin Calculation: Determines requirements based on portfolio volatility rather than fixed percentages.
- Cross-Currency Margin: Converts all crypto equities to USD-equivalent values for margin purposes.
- Reduced Margin Requirements: Offsetting positions across instruments lowers overall margin needs.
Eligibility Requirements
To qualify for portfolio margin mode, traders must:
- Maintain minimum net equity of $10,000 USD.
- Acknowledge understanding of portfolio margin concepts.
Risk Unit Merging Mechanism
Core Principles
Consolidated Risk Units:
- Derivatives with identical underlying assets merge into single risk units
- Includes perpetual futures, expiry futures, and options
Automatic Spot Inclusion:
- Spot assets automatically factor into margin calculations
- Hedged positions between spot and derivatives reduce required margin
| Instrument Type | Example ETH Risk Unit Components |
|---|---|
| Perpetual Futures | ETHUSDT, ETHUSDC, ETHUSD orders |
| Expiry Futures | ETHUSDT, ETHUSDC, ETHUSD orders |
| Options | ETHUSD options orders |
| Spot | ETH/USDT, ETH/USDC spot orders |
Margin Calculation Methodology
Maintenance Margin Requirements (MMR)
Calculated per risk unit considering:
- Possible maximum loss scenarios
- Portfolio stress-testing under various market conditions
Formula: Portfolio MMR = ฮฃ(MMR per risk unit)
Initial Margin Requirements (IMR)
Derived from MMR: IMR = 1.3 ร Derivatives MMR + Borrowed IMR
Risk Assessment Components
The system evaluates 9 distinct risk factors:
- Spot Shock (MR1)
- Theta Decay (MR2) - Options only
- Vega Risk (MR3) - Options only
- Basis Risk (MR4)
- Interest Rate Risk (MR5) - Options only
- Extreme Move (MR6)
- Minimum Charge (MR7)
- Borrowing Margin (MR8)
- Stablecoin Depegging (MR9)
Liquidation Process
Triggered when maintenance margin ratio โค 100%. Executes in sequential phases:
- Dynamic Hedging for Stablecoin Risk (DDH1)
- General Dynamic Hedging (DDH2)
- Basis Hedge Process
- General Position Reduction
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FAQ Section
Q: How does portfolio margin differ from isolated margin?
A: Portfolio margin evaluates overall portfolio risk rather than individual positions, allowing for margin efficiencies through risk offsets.
Q: Can I test portfolio margin without committing capital?
A: Yes, use the Position Builder tool to simulate portfolios and review margin requirements.
Q: What happens during stablecoin depegging events?
A: The system automatically adjusts positions to mitigate risk through dynamic hedging processes.
Q: How often are margin requirements recalculated?
A: In real-time as market conditions and portfolio compositions change.
Q: Are there instruments excluded from risk unit merging?
A: All supported derivatives with common underlying assets participate in risk unit merging.
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Advanced Features
- Auto-Borrow Mode: Allows trading despite currency-specific equity shortages when overall USD-equivalent equity suffices
- Potential Borrowing Calculation: Considers currency tiers and leverage settings
- Tiered Margin Requirements: Varies by asset class and position size
Conclusion
Portfolio margin mode represents a sophisticated approach to cross-margin trading, offering professional traders enhanced capital efficiency while maintaining comprehensive risk controls. By understanding the merging of risk units and dynamic margin calculation methodology, traders can optimize their strategies across multiple instrument types within a unified account structure.