SM vs PM Comparison

A comparison of Standard Margin (SM) and Portfolio Margin (PM), which can be used to determine which type is more favorable for which strategies or portfolios.

In general, PM is more capital-efficient for hedged or complex portfolios, while SM is more favorable for simple long call or put spreads with the same expiry or directional perp strategies.

	Standard Margin	Portfolio Margin
Margin calculation	Each position assessed in isolation (except same-expiry spreads)	Holistic portfolio assessment across 27 shocked scenarios; margin = max portfolio loss + contingency margin
Capital efficiency	Lower generally, but optimal for defined-risk spreads (long call/put spreads capped at max loss)	Up to 10x more efficient for complex or hedged portfolios
Markets per subaccount	All options and perpetual markets in one subaccount	Single market only per subaccount (e.g. ETH or BTC, not both)
Cross-asset collateral	Supported (e.g. use WBTC to collateralize ETH options)	Supported for limited assets (e.g., wstETH in HYPE PM but no HYPE support in the ADA PM)
Same-expiry option spreads	Margin capped at max loss — very efficient for long call/put spreads	Reflected in shock scenarios but no dedicated spread offset rule
Complexity	Simple, beginner-friendly rules	Complex — may be harder to understand for beginners
Best for	Buying call or put spreads — margin already capped at max loss, no PM benefit Trading across multiple markets (ETH + BTC) in one subaccount Using mixed collateral (e.g. WBTC, ETH) Beginners wanting straightforward margin rules	Complex multi-leg strategies with offsetting risk (straddles, condors, delta-hedged positions) Active perp traders holding options as hedges Experienced traders focused on a single market maximizing capital deployment
Risk-cancelling collateral	No.	Yes, for base collaterals (e.g., ETH or wstETH in ETH PM; and HYPE, KHYPE in HYPE PM). If base collateral is used, (hedging) strategies such as selling calls (covered calls) and shorting perps (basis trades) are better in PM. The opposite is also true: when the risk of the base collateral is combined with additional strategy risk, PM penalizes that risk, making it more favorable in SM.