Paradex currently supports Cross Margin for Perpetual Options, allowing traders to benefit from PnL offsetting across futures and options markets.

Paradex will soon offer Portfolio Margin which will significantly improve margin requirements for hedged portfolios, particularly for users that are short Perpetual Options.

Cross Margin Parameters

The parameter values below are examples. The parameters are configurable by the underlying asset.

Fraction Parameter	Initial Margin (IMR)	Maintenance Margin (MMR)
Premium Multiplier	100%	50%
Long ITM Fraction	10%	5%
Short ITM Fraction	7.5%	3.75%
Short OTM Fraction	5%	2.5%
Short Put Cap	50%	50%

Core Idea

Cross Margin Requirements for Perpetual Options depend on their type (call/put), moneyness (out-of-money vs in-the money) and the mark price of the Option. Margin requirements vary by underlying asset.

Margin Calculation

Buying Options

Selling Options

Required Margin = min(Premium Multiplier × Option Mark Price, long_itm × Spot Price)

The margin plots below show the margin requirements for both call and put options across various strikes ranging from deep out the money (OTM) to in the money (ITM).

Examples

The margin plots below show the margin requirements for both call and put options across various strikes ranging from deep out the money (OTM) to in the money (ITM).

Call Options

Put Options