What is the definition of initial margin in the context of cryptocurrencies?

1 answers

• Scarlett RodriguezDec 02, 2025 · 4 months ago
  Initial margin in the context of cryptocurrencies is the amount of funds that traders must deposit in order to open leveraged positions. It serves as a form of collateral to cover potential losses. By requiring initial margin, exchanges can protect themselves from default risk and ensure the stability of their platform. Traders should be aware of the initial margin requirements of the exchange they are using and ensure that they have sufficient funds to cover potential losses. It's also important to regularly monitor positions and adjust margin levels as needed to avoid liquidation.
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