Does a Higher Risk Limit Require a Higher Maintenance Margin?
Yes, a higher risk limit requires a higher maintenance margin. Risk limit systems are tiered, meaning as a trader's position size (risk limit) increases, the exchange requires a progressively higher percentage of maintenance margin.
This is a risk management measure to ensure large positions have a greater capital buffer against liquidation.
Glossar
Higher Strike Price Benefits
Premium ⎊ A higher strike price for a put option increases the premium received by the seller.
Higher Return Potential
Leverage ⎊ Leverage inherent in options structures provides the primary mechanism for percentage change amplification relative to the underlying asset's movement.
Higher Security Setup
Architecture ⎊ A Higher Security Setup mandates a segregated Architecture where hot wallets are minimized and critical signing operations are isolated from online environments.
Higher Standard of Safety
Mitigation ⎊ A higher standard of safety within cryptocurrency, options trading, and financial derivatives necessitates proactive risk mitigation strategies extending beyond conventional portfolio diversification.
Higher High Price Action
Structure ⎊ Higher High Price Action defines a core structural component of an uptrend, characterized by a recent price peak surpassing the level of the preceding peak.
Higher Insurance Costs
Premium ⎊ The escalation of insurance costs within cryptocurrency derivatives markets reflects a confluence of factors distinct from traditional finance.
Higher Intrinsic Value
Measure ⎊ Higher Intrinsic Value is a direct measure of an option's in-the-money status, quantified by the positive difference between the underlying cryptocurrency's spot price and the option's strike price.
Higher Margin Standards
Collateral ⎊ The imposition of higher margin standards within cryptocurrency derivatives, options trading, and broader financial derivatives primarily serves to bolster collateralization requirements.
Higher Pool Fee Structure
Cost ⎊ A Higher Pool Fee Structure denotes a compensation model where the mining pool charges a comparatively elevated percentage of the block reward and transaction fees from its participants for facilitating the aggregation of hash power.
Higher Fee Submission
Action ⎊ Higher Fee Submission is the deliberate practice of attaching a transaction fee significantly above the current market rate to a cryptocurrency transaction to ensure its rapid and preferential inclusion by a block producer.