Margin

Margin Used

Crypta uses an account-level collateral model where a trader's entire account balance acts as collateral for their open positions. A trader cannot lose more than their account balance.

Margin Used is calculated from the position quantity and the market's DeltaMax and is used to determine the account's Margin Level.

$$Margin \; Used = |Quantity| \; *\; \triangle _{Max}$$

DeltaMax is derived from a market's volatility, drift and Bernoulli jump parameters. It is calibrated to capture the vast majority of expected price movements, while recognising that larger movements remain possible but are expected to occur rarely.

Margin Level

Margin Level measures the relationship between the trader's current Equity and their Margin Used.

$$Margin \; Level = \frac{Equity} {Margin \; Used}$$

Margin Level is used by Crypta's risk engine to determine whether the account has sufficient collateral to support its open positions.

A Margin Level below 100% triggers liquidation.