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What Is the Role of a “Margin Requirement Calculator” in Real-Time Risk Management?

A real-time tool that continuously calculates initial and maintenance margin for all positions, enabling timely margin calls and liquidations to ensure solvency.
Greeks.Live22.11.25

What Is the Role of a “Margin Requirement Calculator” in Real-Time Risk Management?

A margin requirement calculator is a core component of an exchange's risk engine. It operates in real-time, continuously monitoring the price of the underlying asset and the value of the collateral to determine the exact initial and maintenance margin required for every open position.

By constantly recalculating the margin, it allows the exchange to issue timely margin calls or trigger liquidations immediately when a position's equity drops below the maintenance level, ensuring the exchange's solvency and preventing negative equity.

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