What Is the Difference between an Equity Margin Call and a Portfolio Margin Call?
An equity margin call occurs in a standard margin account when the total equity falls below the maintenance margin level. A portfolio margin call, however, occurs within a portfolio margining system, which assesses risk based on the net risk of the entire portfolio.
A portfolio margin call is triggered if the calculated risk-based margin requirement for the whole portfolio is no longer met by the available equity.
Glossar
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.
Portfolio Margin Account
Collateral ⎊ Portfolio margin accounts, prevalent in cryptocurrency derivatives and options trading, fundamentally rely on posted collateral to underwrite potential losses.
Portfolio Margining System
Collateral ⎊ Portfolio margining systems, particularly within cryptocurrency derivatives, fundamentally revolve around the management and optimization of collateral posted by traders.
Equity Margin Call
Trigger ⎊ An equity margin call within cryptocurrency derivatives, options trading, and financial derivatives arises when the equity in a trading account falls below the required maintenance margin level, necessitating additional funds to cover potential losses and maintain open positions.
Portfolio Margin Accounts
Collateral ⎊ Portfolio Margin Accounts represent a risk-based framework utilized within cryptocurrency derivatives trading, demanding a higher level of financial commitment than standard margin accounts.
Portfolio Margin Call
Demand ⎊ This signifies the formal requirement from a clearing firm or prime broker for a client to deposit additional capital into their margin account to cover a net deficit across their entire portfolio of positions.