Portfolio Margin

Derive supports two margin systems: Portfolio Margin and Standard Margin. This article focuses on Portfolio Margin, how it works, and who should use it. Learn more about Standard Margin here.

Portfolio Margin is not enabled by default for users. Learn how to enable Portfolio Margin here.

What is Portfolio Margin?

Portfolio Margin is a margin calculation technique based on the following insight: you should only be required to post as much margin as your maximum loss, and no more.

The calculation has three steps:

Step 1: Calculate the total PNL of all your positions (long options, short options, and perps) across 27 different shocked scenarios. Examples of a shocked scenario:

Step 2: Take the maximum loss calculated from the shocked scenarios.

Step 3: You are only required to post this maximum loss as your margin:

When should you use Portfolio Margin?

Traders should use Portfolio Margin when they want the highest capital efficiency and are only interested in trading markets in isolation.

Benefits:

Considerations:

Learn more about Portfolio Margin in the documentation.