Why Is a Miner's Short Futures Position Subject to Margin Calls If the Cryptocurrency Price Rises? ⎊ Path

Why Is a Miner’s Short Futures Position Subject to Margin Calls If the Cryptocurrency Price Rises?

A short futures position is a bet that the price of the underlying asset will fall. If the cryptocurrency price rises, the short position incurs a loss.

Futures contracts require a margin account to be maintained at a certain level, known as the maintenance margin. When the unrealized loss causes the margin balance to fall below this level, the miner receives a margin call, demanding an immediate deposit of additional funds to cover the loss and restore the margin.

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