How Do Margin Requirements for Options Contracts Differ from Futures Contracts on These Platforms? ⎊ Path

How Do Margin Requirements for Options Contracts Differ from Futures Contracts on These Platforms?

Options contracts typically require margin only from the seller (writer) to cover potential losses if the option is exercised against them. The buyer pays a premium upfront, which is their maximum loss.

Futures contracts, however, require both buyer and seller to post initial margin. This margin covers potential losses from daily price movements, and maintenance margin must be upheld throughout the contract's life.

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Glossar

Margin Requirements for Options

Collateral ⎊ Within cryptocurrency options trading, collateral requirements for margin dictate the assets a trader must hold to cover potential losses arising from their positions.

Portfolio Margining Impact

Efficiency ⎊ Portfolio margining significantly impacts capital efficiency by calculating margin requirements based on the net risk of a collection of positions rather than individual trades.