How Does the Time-to-Settlement Affect the Volatility Caused by Margin Calls?

A shorter time-to-settlement (e.g. T+0 in crypto vs.

T+2 in traditional finance) generally reduces the volatility caused by margin calls. Faster settlement means losses are recognized and margin is adjusted more quickly, leading to immediate, smaller liquidations rather than a build-up of large, delayed losses.

However, the speed also means the forced selling pressure is applied instantly, which can still create rapid short-term volatility spikes.