How Is Portfolio Margining Different from Simple Cross-Margining? ⎊ Path

How Is Portfolio Margining Different from Simple Cross-Margining?

Simple cross-margining typically involves offsetting margin requirements between specific, pre-defined pairs of related contracts. Portfolio margining is a more sophisticated, holistic approach that calculates the total risk of the entire portfolio, often using models like SPAN, to determine a single, risk-based margin requirement.

Portfolio margining provides a greater margin reduction for complex, hedged strategies.

What Is ‘Portfolio Margining’ and How Can It Affect Margin Requirements for Derivatives?

Does Physical Settlement Impact the Tax Treatment of the Derivative Transaction?

What Is a ‘Wrapped’ Token and Why Is It Often Used in Token Pairs?

How Does Portfolio Margining Differ from Standard Margin Calculations?

How Do Different Fee Tiers (E.g. 0.05%, 0.30%) Impact an LP’s Fee-Earning Strategy?

What Is Portfolio Margining and How Does It Differ from Standard Margining?

What Is the Difference between Portfolio Margining and Gross Margining for Derivatives?

What Is the Difference between an Equity Margin Call and a Portfolio Margin Call?

Glossar

Margining

Collateral ⎊ Margining represents the process of adjusting the assets pledged as security for derivative contracts, reflecting changes in market risk and counterparty credit exposure.

Portfolio Margining

Framework ⎊ Portfolio margining, within cryptocurrency derivatives and options trading, represents a sophisticated risk management technique that dynamically adjusts margin requirements based on the overall portfolio’s risk profile rather than individual positions.