Why Is Margin Not Required for Buying an Option?
Margin is not required for buying an option because the buyer's maximum potential loss is limited to the premium paid upfront. Since the premium is paid in full at the time of the trade, there is no credit risk or open loss exposure for the broker or clearing house to cover.
The option buyer is not leveraged in the same way a futures trader is.
Glossar
Buying
Execution ⎊ Buying within cryptocurrency, options, and derivatives contexts signifies the confirmed instantiation of an order to acquire an asset or contract at a prevailing or specified price, representing a commitment of capital and a shift in portfolio composition.
Premium Payment Flow
Mechanism ⎊ Premium payment flow within cryptocurrency derivatives represents the transfer of collateral, typically stablecoins or the underlying cryptocurrency, to satisfy margin requirements or option premium obligations established by exchange rules and contract specifications.