In the Context of Derivatives, How Does a Margin Call Relate to the Concept of Impermanent Loss?
A margin call in derivatives occurs when the equity in a trader's margin account falls below a required maintenance margin, forcing them to deposit more funds or face liquidation. Impermanent loss, while not a forced liquidation, represents a loss in value compared to simply holding the assets.
Both concepts involve a risk of loss due to price movement. However, a margin call is a mechanism for risk management in leveraged trading, while impermanent loss is an inherent risk of providing liquidity to an AMM.
