Does the Exchange Hold the Margin or Is It Locked in the Contract? ⎊ Path

Does the Exchange Hold the Margin or Is It Locked in the Contract?

The margin is held by the exchange in the trader's futures account wallet. It is not locked directly into the contract itself.

The exchange's risk management system continuously monitors the balance in this wallet against the maintenance margin requirements of all open positions. The margin acts as collateral that the exchange can claim if liquidation occurs.

What Is the Difference between a House Account and a Customer Account for Margining?

What Legal Entity Typically Holds the Assets of the Insurance Fund?

How Does a Cross-Margin Account Differ from an Isolated-Margin Account?

What Is the Difference between a Multisig Wallet and a Single-Signature Wallet?

What Happens If the Third-Party Company Providing the Multisig Wallet Service Goes out of Business?

What Is ‘Free Margin’ in a Trading Account?

How Does a “Cross-Margin” Account Differ from an “Isolated-Margin” Account during Liquidation?

Explain the Difference between Custodial and Non-Custodial Collateral Management in Stablecoins

Glossar

Risk Management System

Calibration ⎊ A robust risk management system within cryptocurrency, options, and derivatives necessitates continuous calibration of models to reflect evolving market dynamics and liquidity profiles.

Maintenance Margin Requirements

Threshold ⎊ Maintenance Margin Requirements are the minimum level of equity or collateral that a derivatives trader must continuously maintain in their account to keep open positions active, calculated as a percentage of the total contract value.