What is the difference between initial and maintenance margin in the context of cryptocurrency trading?

3 answers

• Nov 26, 2021 · 3 years ago
  In cryptocurrency trading, the initial margin refers to the amount of collateral required to open a position. It acts as a safety net for the exchange in case the trader's position goes against them. The maintenance margin, on the other hand, is the minimum amount of collateral that must be maintained in the trader's account to keep the position open. If the account balance falls below the maintenance margin, the trader may receive a margin call and be required to add more funds to their account or close the position. It's important to understand and manage both the initial and maintenance margin to avoid liquidation and potential losses.
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• Nov 26, 2021 · 3 years ago
  When you start trading cryptocurrencies, you'll come across the terms initial margin and maintenance margin. The initial margin is the amount of money you need to deposit upfront to open a position. It acts as a form of collateral to cover any potential losses. The maintenance margin, on the other hand, is the minimum amount of funds you need to keep in your account to sustain your position. If your account balance falls below the maintenance margin, you may be required to add more funds or your position could be liquidated. So, it's crucial to monitor your margin levels and ensure you have enough funds to support your trades.
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• Nov 26, 2021 · 3 years ago
  Initial and maintenance margin are two important concepts in cryptocurrency trading. Initial margin refers to the initial deposit required to open a position. It acts as a form of collateral and helps protect the exchange from potential losses. On the other hand, maintenance margin is the minimum amount of funds you need to maintain in your account to keep your position open. If your account balance falls below the maintenance margin, you may receive a margin call and be required to add more funds. It's essential to understand the difference between these two margins and manage your positions accordingly to avoid liquidation.
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