What Is a “Tiered Margin” System?
A tiered margin system is an exchange policy where the maximum allowable leverage decreases as the notional value of the trader's position increases. For example, a trader might be allowed 100x leverage for a $10,000 position, but only 50x for a $100,000 position.
This system is a key risk management tool for the exchange to reduce the size of potential losses that could strain its insurance fund.
