What Are the Eligibility Requirements for a Portfolio Margin Account?
Eligibility for a portfolio margin account typically requires a minimum account equity of $100,000 to $125,000, as well as approval from the broker. The client must also be approved for the highest level of options trading (naked writing) and be deemed experienced enough to understand the complex risks associated with the increased leverage.
Glossar
Portfolio Margin Account
Collateral ⎊ Portfolio margin accounts, prevalent in cryptocurrency derivatives and options trading, fundamentally rely on posted collateral to underwrite potential losses.
Eligibility Requirements
Requirement ⎊ Eligibility requirements define the minimum standards necessary for participation in derivatives markets or access to specific financial products.
Minimum Account Equity
Equity ⎊ Within cryptocurrency derivatives and options trading, minimum account equity represents the absolute lowest capital level required to maintain an active trading account and avoid margin calls or forced liquidation.
Portfolio Margin
Collateralization ⎊ Portfolio margin represents a risk-based approach to determining required collateral for derivatives positions, notably in cryptocurrency options and futures, differing from standardized margin by factoring in the correlation and volatility of the entire portfolio.
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.