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How Do Margin Requirements Change for Volatile Crypto Derivatives?

Due to the extreme volatility of cryptocurrencies, clearing houses impose significantly higher initial margin requirements. The margin models use larger stress parameters to capture potential price swings.

Higher margin acts as a crucial safeguard against rapid, large losses, reflecting the higher inherent risk in the crypto market.

How Does the Concept of “Volatility Smile” Change during Extreme Market Stress?
How Can Mutability Help a Derivatives Platform Adapt to Extreme Market Volatility?
What Is a ‘Stress Test’ and How Does It Inform Collateral Requirements?
How Do Volatile Assets like Cryptocurrencies Affect Margin Requirements?