Does the Maintenance Margin Change Based on the Underlying Asset?
Yes, the maintenance margin requirement changes based on the underlying asset. Assets with higher volatility or lower liquidity (e.g. smaller altcoins) are considered riskier.
To mitigate the risk of a large deficit, exchanges typically require a higher maintenance margin percentage for these riskier assets compared to highly liquid, stable assets like Bitcoin.
Glossar
Maintenance Margin
Collateral ⎊ Within cryptocurrency derivatives and options trading, the maintenance margin represents the minimum equity a trader must maintain in their account to cover potential losses.
Margin Percentage
Leverage ⎊ Margin percentage, within cryptocurrency and derivatives markets, represents the capital required relative to the total trade exposure, directly influencing potential profit magnification and associated risk.
Volatility
Measurement ⎊ Volatility, in quantitative finance, is the statistical measurement of the dispersion of returns for a given financial asset, typically quantified by the annualized standard deviation of its price movements.
Liquidity
Trading Capacity ⎊ Liquidity describes the ease with which an asset can be bought or sold in large quantities without substantially affecting its market price, measured by volume, bid-ask spread, and order book depth.