What is the impact of variation margin vs initial margin on cryptocurrency trading?

1 answers

• Dec 20, 2021 · 3 years ago
  When it comes to cryptocurrency trading, variation margin and initial margin are two important factors to consider. Variation margin refers to the additional funds that traders need to deposit to cover potential losses in their positions. It is calculated based on the market value of the position and helps to ensure that traders have sufficient funds to cover any adverse price movements. On the other hand, initial margin is the initial amount of collateral required to open a position. It acts as a buffer against potential losses and helps to protect the exchange from default risk. The impact of variation margin and initial margin on cryptocurrency trading is significant. They help to manage risk, maintain market stability, and protect traders from excessive losses. Traders should carefully monitor their margin levels and ensure they have enough funds to meet the margin requirements set by the exchange.
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