What Are the Advantages of a Unified Margin Account despite the Increased Risk?
A unified margin account offers capital efficiency, as the entire balance can be used to support all positions, reducing the total required collateral. It also simplifies the management of complex strategies, like hedging, where offsetting positions can benefit from the shared margin pool.
This allows traders to deploy capital more flexibly.
Glossar
Margin Account
Leverage ⎊ A margin account in cryptocurrency, options, and derivatives trading represents an equity-backed loan from a broker, enabling traders to control a larger position than their available capital would otherwise permit.
Unified Margin Account
Collateral ⎊ A Unified Margin Account (UMA) in cryptocurrency derivatives consolidates margin requirements across multiple positions, encompassing spot, futures, and options contracts, reducing capital fragmentation.
Unified Margin
Collateralization ⎊ Unified Margin represents a risk-based approach to collateral requirements within cryptocurrency derivatives exchanges, dynamically adjusting margin levels based on an aggregate assessment of a trader’s positions and associated volatility.