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Why Are Tail Risk Events Particularly Important for Derivatives Margin?

Tail risk events, which are low-probability, high-impact occurrences, are crucial because derivatives, especially options, can generate non-linear and disproportionately large losses in extreme market moves. Margin must be sufficient to cover these rare but catastrophic losses to prevent a CCP failure and systemic crisis.

How Can the Risk of a Cease and Desist Order Be Priced into a Token’s Option Premium?
What Is the Relationship between “Black Swan” Events and Tail Risk?
How Does This Exponential Price Increase Relate to the Concept of “Price Impact” on a Trade?
How Does the Black-Scholes Model Account for the Probability of a Catastrophic Event like a 51% Attack?