Initial margin rate
Definition
The initial margin rate is the fraction of a position’s value required as initial collateral, subject to the venue’s rules.
How initial margin rate works
The initial margin rate is the fraction of a position’s value required as initial collateral, subject to the venue’s rules.
Translate an opening collateral rule into cash needed.
Example
Assume this opening requirement solely for illustration: at a hypothetical rate of 0.08, a 5000 USDT position requires 400 USDT initial margin before other reserves.
Common mistakes
- Opening fees may need additional funds beyond initial margin.