Perpetual Options

Margin Requirements

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 ParameterInitial Margin (IMR)Maintenance Margin (MMR)
Premium Multiplier100%50%
Long ITM Fraction10%5%
Short ITM Fraction7.5%3.75%
Short OTM Fraction5%2.5%
Short Put Cap50%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

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 Option Margin Requirements