Margin

Description

Margin is the amount of USD posted as collateral to open and maintain open a position. All open positions and resting limit orders are fully collateralized. Opposite side orders do not offset each other's margin requirement. This prevents the margin exchange from having to liquidate orders and ensure full payout to the winner of the contract as one trader's profit is an opposing trader's margin. Therefore, losses for a position are capped at margin and percent returns are measured against margin. Since all open positions are fully collateralized, there are no margin calls.

Formula

The formula for calculation of the margin requirement of an order is as follows $longMargin = round Up (C * P)$ $shortMargin = round Up (C * (1 - P))$

Where

C = number of contracts P = average price of position or limit price of resting limit order roundUp = margin is rounded up to the nearest centicent

Reduce Only Orders

To post a resting limit order a user needs to have enough USD in his wallet to post margin. However, marketable orders that offset an existing position (i.e. an order that immediately reduces a position) use the existing position to offset the margin requirement.

Minimum Margin

The minimum margin requirement for submitting an order is 0.1 cent. Orders that require a margin amount below this level will be rejected.